The report, by professional services firm KPMG, has found that after childcare fees and tax, some women may find themselves paying for the privilege of working.
Given the finding, KPMG suggests allowing more mums on higher incomes to access the full childcare subsidy, as well as encouraging more men to work part time — so their partners can work more.
The report found about 125,000 partnered women with children across various income spectrums could be worse off when increasing their days at work to more than three a week.
Women are the ones worst hit by effective marginal tax rates — that is, the proportion of every extra dollar earned that is lost to the family after taking account of additional income tax paid, loss of family payments, loss of childcare subsidies and increased out-of-pocket childcare costs. The report calls it the "working disincentive rate".
If a couple with two young children in long day care both earned the minimum wage rate of about $37,500, the family is only about $900 a year better off. This is because the family loses 88 per cent of their extra $7,500 in income when the mother increases her working days from three to four per week.
