DeluxeCalc

One Income vs Two Income Household

What happens if one partner stops working?

About this calculator

When one partner thinks about leaving work, to care for children, to study or for any other reason, the household loses less than that partner's salary. Taxes take a share of the second income, and some costs exist only because both partners work: childcare, commuting, work clothes and convenience meals. On the other side, health insurance may change and retirement contributions and any employer match stop. This calculator works through those pieces and shows how much the monthly budget really changes on one income, what partner 2's job is worth after costs, and the retirement savings that would be given up.

How to use this calculator

Enter each partner's gross annual salary, with partner 2 being the one who would stop working, and a flat State Income Tax rate. Then enter the monthly costs that would stop: Childcare, Commuting and Other Work Costs. Enter partner 2's 401(k) contribution and Employer Match, both as a percentage of salary, and any Health Insurance Change: the extra a month you would pay on one income, for example to move partner 2 onto partner 1's family plan, or a negative number if it would cost less. Under Advanced assumptions you can set partner 2's Hours per Week, the Years Out of Work and the Investment Return used to grow the missed retirement contributions. The page updates as you type, and the inputs are stored in the page address.

The method

Take-home pay is worked out for the household twice, with both salaries and with partner 1's salary alone, filing jointly in both cases. Federal income tax is figured once on the couple's combined wages after partner 2's 401(k) contribution, using the 2026 married-filing-jointly brackets and the $32,200 standard deduction, with the same engine as the DeluxeCalc salary calculator. Social Security and Medicare are figured separately for each worker, because the Social Security wage base applies per person. State tax is the flat rate on wages after the 401(k) contribution. Take-home pay is gross pay less those taxes and partner 2's 401(k) contribution. Monthly cash with two incomes is take-home pay less the work costs; with one income it is take-home pay less the health insurance change. The budget change is the difference. Partner 2's job value per hour divides the yearly difference by 52 weeks of the hours you enter, and as a percentage it divides it by partner 2's salary. The retirement savings forgone are the 401(k) contributions plus the match, invested monthly at the investment return for the years out of work.

Worked example using the default values

Partner 1 earns $90,000 and partner 2 earns $60,000, with a 5% state tax. With both working, the household takes home $9,421 a month after $300 of partner 2's 401(k) contributions; on partner 1's salary alone it takes home $6,015. Partner 2's pay adds $1,293 a month of federal, state and payroll tax. Stopping work also ends $1,200 of childcare, $300 of commuting and $150 of other work costs, $1,650 in all, so monthly cash goes from $7,771 to $6,015: going to one income changes the monthly budget by −$1,757. That is 35% of partner 2's gross pay, or $10.14 for each hour of a 40-hour week. Over 5 years out of work, the $5,400 a year of missed contributions and match would have grown to $31,269 at 6%.

Interpreting the results

The headline is the change you would need to absorb in the monthly budget. A negative figure is the cut needed to live on one income; a positive one means work costs exceed what partner 2's job adds, and the household would have more cash on one income. The bar shows where each dollar of partner 2's gross pay goes, which is often the most surprising part: the second income is taxed starting at the household's top bracket, and childcare can take a large share. The hourly figure is a useful gut check when comparing a job with staying home, but it leaves out the career side of the decision, such as raises, promotions and skills that can be harder to regain after a long break.

Practical tips

Before deciding, try living on one income for a few months and save the second paycheck; it tests the budget and builds a cushion. Check the cost of family health coverage through partner 1's employer and when you can enroll, usually within 30 days of losing other coverage. A spousal IRA lets a working spouse contribute for a non-working spouse, which can make up part of the lost retirement savings. Childcare costs fall as children start school, so run the calculator again for the years ahead; the answer often changes.

Limitations

The calculator uses the standard deduction and ignores credits such as the Child Tax Credit and the Child and Dependent Care Credit, which can change the figures. State tax is a single flat rate, while most states use brackets and their own deductions. FICA is figured as withheld, with the $200,000 Additional Medicare threshold per worker rather than the $250,000 joint threshold that applies on the tax return. Health insurance changes are entered after tax. Pay raises, Social Security benefits earned on partner 2's record, and the cost of re-entering the workforce are not modelled.

Frequently Asked Questions

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