MY MONEY

How to work four days a week without losing 20% of your salary

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When Thursday afternoon rolls around I always look as smug as the Cheshire cat. Not only is it my weekend, but it's a three day weekend because I choose to work four days a week.

For many, part-time work is a necessity in busy family life but it can also be an opportunity for others when the small drop in pay is compensated by living a richer life.

Given this is a site about money lets first make sense of the dollars. Working four days a week instead of the normal five doesn't mean a fifth less pay, due to marginal tax rates.

Using the median Australian income of $1320 a week for full-time employment your wage would drop by $176 a week or a 16% drop. This may seem like a significant drop in pay, and for some households, it might just be too much.

working four days a week

With more time there are many other positive impacts part-time work can have on your life which inevitably often cost you less, therefore mitigating any loss of income and making your life richer.

If your inner greenie sometimes makes you feel a little guilty then you'll be pleased to know that working less can be better for the environment.

If you always meant to start your own veggie garden or would rather repair items than buy new but never had the time then one day less work will give you that time and help the planet.

start a vegetable garden

Because I don't need to outsource daily tasks I find I save money on household expenses like groceries and bills.

I have time to meal plan, make delicious home-cooked meals including work lunches as well as time to call and find better deals on our household bills. An extra day a week also allows me time to shop around and find a better deal on bigger items like travel, appliances or furniture.

Working part-time is also better for my health. Not only do I love my Friday sleep in's as they always feel very luxurious but with the extra time to grow my own veggies, visit the butcher or greengrocer and plan out meals I feel I eat better, which my immune system thanks me for.

More time means longer walks with the dog, a bike ride on a sunny day and less reliance on my car to get somewhere quickly which mean less petrol and less pollution. You may also find a greater sense of community with more time on your hands to volunteer or be involved in local groups.

I actually didn't set out to work part-time but after a short term 20-hour-a-week role I just couldn't quite give up all that extra time. From a career perspective, I have found four days a week is the easiest to negotiate with employers and a pay level I feel comfortable with.

Currently in Australia, 32% of the workforce is part-time with 14% of managers (an increase of 1% in five years) and 26% of professionals undertaking part-time work.

Although part-time work is not possible in all jobs, I don't feel it has a limiting effect on my own career progression.

Besides the obvious drop in take-home pay, there are some other downsides to working part-time. Firstly, along with a pay cut you also receive less superannuation which could have ramifications in retirement.

In addition, I sometimes feel I'm doing a full-time role but jamming it into four days, luckily I prefer to be productive at work but it can sometimes be frustrating, plus I miss out on casual clothes Friday!

If you like the idea of extra time but don't think part-time would work in your current position here are some other options to consider:

48/52 (or similar)

Many organisations have the concept of "purchased leave", normally with a minimum of two weeks (50/52). In the example of 48/52 you would receive your normal four weeks annual leave plus an extra four weeks of "purchased leave".

You are then paid for only 48 weeks of the year but it's averaged over your normal 52 weeks of pay, therefore, decreasing your pay by only around 8%. Perhaps a few extra long weekends and an extra holiday could be your happy medium?

Working remotely

In a growing technological world, more and more companies allow work from home or remote work opportunities. It may only be a day or two out of the week but saving a long commute could be all the extra time you need!

There's no harm in sitting down and calculating where to make some cuts (to your work hours and your budget) as well as asking your employer about what variations on the average 9-5 full time might be considered.

The key to living a richer life doesn't always come down to money, more often than not it's about freedom over your own time.

With more workers realising the benefits and making a conscious decision to work less there will be more jobs available with co-workers who are healthier, happier and more productive.

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Brenda James dreams of exploring the world on her dividends and loves talking money.
Comments
Frederika
March 21, 2019 7.20am

Great article. I particularly agree that productivity gains are to be had when workers are happier, more relaxed and motivated.

Jenny
March 21, 2019 9.30am

The drop of only $176/week - how do you get that calculation? Is that after the tax effect on a $1320 a week for full-time employment, not just a 1320/5 x 4 ?

Jenny
March 21, 2019 9.31am

Totally agree

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