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In countries with relatively high progressivity in taxes the equation becomes even more attractive. You lose 20% of your pre-tax salary, but you lose much less

In countries with relatively high progressivity in taxes the equation becomes even more attractive. You lose 20% of your pre-tax salary, but you lose much less on your post-tax salary. In europe the marginal tax can easily be close to (or even over) 50% so in practice you work 20% less hours and lose 10% of your post tax salary. The thing that amazes me is why people do not push for this more.

GordonS 6y ago
I'd think inertia keeps a lot of people staying with how they've always worked and what they know, and what all/almost all of their colleagues do; they've never even considered it, or even know it might be an option. And of course, it must be recognised that purely for financial reasons it's not going to work for everyone.
derwiki 6y ago
One reason folks may not push for it is that they worry their career progress will stall if they opt for reduced hours. Whether that’s actually true or not, I’m not sure, but I’ve first hand seen the perception influence someone’s decision.
- IkmoIkmo 6y ago
  Definitely get the sense that's true for me. Although at the same time I see a lot of people in mid-level management / senior positions, making quite good money, and working parttime. But I guess you have to get there first. I also feel it'd be looked down upon when I (30) would do it. If I was say 53, or say I had kids, it'd be much more normal. But if you're taking time off without kids at 30, you're really kind of signalling you value leisure more than work and more than money. That's a very normal thing of course, but for a corporate environment looking to execute on a long list of deliverables, they'll not be keen to put their trust in such a person to drive that process.
IkmoIkmo 6y ago
> 50% so in practice you work 20% less hours and lose 10% of your post tax salary That's not how the math would work out. Suppose you make $100k in 5 days gross and pay 40k tax, keep 60k net. Suppose you drop to 80k gross, and suppose that the 20k you lost would otherwise have been taxed by 50%. That means you'd drop to 50k net, from 60k. That's a 16% drop, not a 10% drop. But agreed, your argument still holds on principle, due to the tax rate the drop in net income will be smaller than the drop in time, which is a great argument! However, there are other perspectives you can take as well. One is favorable for your argument, e.g. the drop in net salary (16%) comes at an increase of 50% of your weekend (from 2 to 3 days). But also unfavorable, for example, perhaps your 'fixed' living expenses (e.g. rent, insurance, basic food selection etc) comes out at 30k net a year. Dropping from 60k to 50k, means your disposable income for recreational expenses (or deferred recreational expenses, through savings) drops from 30k to 20k, or 33%. That's the downside of the whole story I haven't seen anyone mention in this thread yet. Particularly at lower salaries, fixed expenses can swallow up almost the entire paycheck leaving very little for savings, trips overseas to explore the world, fun things like hobbies, gaming etc. A lot of people spend 70-90% of their paycheck on rent, healthcare insurance etc and have 10% left over, taking off 1 day a week can really cut into that disposable income much more than 16% or 20%.

GordonS 6y ago

I'd think inertia keeps a lot of people staying with how they've always worked and what they know, and what all/almost all of their colleagues do; they've never even considered it, or even know it might be an option. And of course, it must be recognised that purely for financial reasons it's not going to work for everyone.

derwiki 6y ago

One reason folks may not push for it is that they worry their career progress will stall if they opt for reduced hours. Whether that’s actually true or not, I’m not sure, but I’ve first hand seen the perception influence someone’s decision.

IkmoIkmo 6y ago
Definitely get the sense that's true for me. Although at the same time I see a lot of people in mid-level management / senior positions, making quite good money, and working parttime. But I guess you have to get there first. I also feel it'd be looked down upon when I (30) would do it. If I was say 53, or say I had kids, it'd be much more normal. But if you're taking time off without kids at 30, you're really kind of signalling you value leisure more than work and more than money. That's a very normal thing of course, but for a corporate environment looking to execute on a long list of deliverables, they'll not be keen to put their trust in such a person to drive that process.

IkmoIkmo 6y ago

> 50% so in practice you work 20% less hours and lose 10% of your post tax salary That's not how the math would work out. Suppose you make $100k in 5 days gross and pay 40k tax, keep 60k net. Suppose you drop to 80k gross, and suppose that the 20k you lost would otherwise have been taxed by 50%. That means you'd drop to 50k net, from 60k. That's a 16% drop, not a 10% drop. But agreed, your argument still holds on principle, due to the tax rate the drop in net income will be smaller than the drop in time, which is a great argument! However, there are other perspectives you can take as well. One is favorable for your argument, e.g. the drop in net salary (16%) comes at an increase of 50% of your weekend (from 2 to 3 days). But also unfavorable, for example, perhaps your 'fixed' living expenses (e.g. rent, insurance, basic food selection etc) comes out at 30k net a year. Dropping from 60k to 50k, means your disposable income for recreational expenses (or deferred recreational expenses, through savings) drops from 30k to 20k, or 33%. That's the downside of the whole story I haven't seen anyone mention in this thread yet. Particularly at lower salaries, fixed expenses can swallow up almost the entire paycheck leaving very little for savings, trips overseas to explore the world, fun things like hobbies, gaming etc. A lot of people spend 70-90% of their paycheck on rent, healthcare insurance etc and have 10% left over, taking off 1 day a week can really cut into that disposable income much more than 16% or 20%.