It’s about what ends up in your pocket.

The decision to work another day sets in motion a whole series of changes that need to be understood to work out just how much actually helps the family budget.

A closer look may reveal that an extra day’s work may be for no extra income for a family when considering tax, child care costs, and potential changes in family payments and subsidies. In fact - for some families, an extra day’s work may even make the family budget worse than not working at all.

This is a focus of government and policy makers - and the reality is that changes to the rules affect different families in different ways.

It’s worth reading a bit more about how this can happen.

We believe that decisions around work should be based on all the information available - and that is where we can help.

How much is left to spend?

The first step to getting in control of this decision is to look closely at how you arrive at the amount you have to spend.

There are many parts to this story. It’s not just about your income. There are taxes, benefits and allowances - which all depend on your unique family situation.

For example, the decision to work another day may see your income increase. This could then mean more tax to pay. Higher family income may see a reduction in eligibility for government support, like Family Tax Benefit Part A & B. Higher family income may see the rate of Child Care Subsidy % decrease, making per day child care costs higher. All of this needs to be taken into consideration to get to the bottom of what an extra day working will mean for the family budget.

A really good snapshot of this can be found in this study by the Australian Bureau of Statistics. It’s complicated - and that is a problem for young families.

The key lesson here is that things are more complicated than you think. And this is just the starting point.

How do you know how much you are actually earning?

This is where it gets complicated - and at the same time vitally important.

The experts have tried to work out what happens to the household bottom line when making a decision to work another day.

It’s more than just knowing about tax - it’s about calculating the impact of a whole range of government rules, and thinking of this like an overall tax.

The word the experts use is the “effective Marginal Tax Rate”, and we first came across this analysis in 2015 when the Productivity Commission was looking at Childcare and Early childhood learning.

What was interesting, was that the analysis had to have a bunch of different “cameos”, or family situations, and in each case the unique family situation made for a different outcome when considering how financially beneficial and extra days work could be.

It’s buried deep in the report (from page 891), and it’s important.

This way of looking at how all the different payments, subsidies and incentives could be put together to give a financial outcome in deciding to work an extra day was also used extensively in the Grattan report Cheaper childcare : A practical plan to boost female workforce participation.

Somewhere along the way it has become known as the “Workforce disincentive rate” - which refers to the impact on the more complex elements of income on family budgets when there is a decision to work an extra day.

This way of looking at the financial implications of working has also been cited by Labor, in their announcement of their Child Care Plan. This is a complicated problem and takes a complicated analysis to get to the bottom of what government proposals for change actually mean to all the different types of families that will be trying to understand what it means for them.

Why can’t everyone look at their household budget this way?

Unfortunately, most families don’t have the time or resources to estimate the financial impact of these decisions.

It’s not just that families are unique and need some serious number crunching to enable them to make informed decisions. There is an extra layer of complexity as things change over time - childcare needs change, income changes, the onset of school. Life is complex enough without then being faced with some serious number crunching. The result is that most families only know the impact of their decisions when looking in the rear vision mirror.

We believe they should have this firepower, and have built the tools to get the right answers to make the best decisions.