Should You Work Less and Pay Less Tax?

Should You Work Less and Pay Less Tax? A Real Question Many Professionals Are Asking

A few weeks ago, a client of mine, a dentist in her mid-40s, asked something that many high-income professionals quietly think about:

“If I cut back to four days a week, will my take-home actually change that much? Or am I exhausting myself for money I barely keep?”

It is an honest question. A very human one. And most people never sit down to compare the numbers.

Many Australians earning between $150,000 and $300,000 feel caught between two things they care deeply about: the need for financial security, and the desire for more time for family, time for health, and time to live at a pace that feels sustainable.

There is a common belief that earning less is “bad” because of tax take home would be low. But once you look a little closer, the picture is not as simple as it seems. For many professionals, working fewer days does not reduce your take-home income as much as expected, and the time you gain back often becomes far more valuable than the dollars you give up.

This article explains why.

A Real Scenario: Five Days vs Four Days

My client earns well in her dental practice. Let us say roughly $2,000 a day × 5 days = $10,000 a week before tax.

She wanted to know what her week and her bank account would look like if she worked four days instead of five. Her question was straightforward:

“If I lower my income by 20 percent, will my take-home also fall by 20 percent?”

The answer is no, and the reason is tax brackets. When your marginal tax rate is high, the last dollars you earn are taxed the most. So when you stop earning those heavily-taxed dollars, the drop in take-home pay is much smaller than the drop in gross income.

Why More Work Does Not Always Mean More Life

Many high-income earners sit in the 37 to 45 percent tax bracket. That means:
• the first part of your income is taxed at lower rates
• the last part is taxed at the highest rates

So when you reduce your working days, you are mostly removing income that was going to be taxed heavily anyway.

Here is a simple illustration:

Working 5 days
Income: $250,000
Approx take-home: around $170,000

Working 4 days
Income: $200,000
Approx take-home: around $143,000

Your income drops by $50,000, but your take-home drops by about $27,000.

Put another way:
You gain 52 extra days of life every year for about $500 a week.
For many people, especially parents, that is a trade worth considering.

A Mindset Shift: From Maximising Income to Maximising Life

When you talk to professionals in their 30s, 40s, and 50s, a pattern emerges. They are not chasing maximum income anymore. They are chasing a life that feels balanced and meaningful.

They want:
• mornings without rushing
• afternoons with their children
• space to think, breathe, and recover
• a week that feels human

The old mindset was simple:
“Earn as much as you can.”

But more people are moving toward a new mindset:
“Earn enough and live more.”

Once you understand how little some of your extra income actually ends up in your pocket, the conversation becomes less about money and more about what matters.

A Practical Way to Decide: Look at the Numbers, Not the Fear

This decision should not be based on guesswork. It should start with clear numbers:
• your current income
• your proposed income
• your tax
• your Medicare levy
• your new take-home
• your weekly and yearly difference

When you see the numbers clearly, the emotional part becomes easier.

Some people realise the difference is small enough to say “Yes, this gives me my life back.” Others may decide the timing is not right yet, which is completely fine. What matters is clarity.

Another Real Example: A Software Engineer on $220,000

A client of mine in tech recently shared his story. He was burning out, constantly tired by Thursday, and considering a shift to a four-day week. This would reduce his salary from $220,000 to around $176,000.

Here is what actually happened:
• his take-home fell by about $25,000 a year
• his weekly take-home dropped by about $480
• his stress level dropped dramatically
• he had time to exercise again
• his weekends felt longer
• his work quality improved

And he said something that stayed with me:

“I did not lose money. I gained time — and time is worth more.”

A Calculator You Can Use

Soon, I will add a simple calculator to The Wealth Story, where you can:
• enter your current income
• enter your reduced working days
• see your new tax and take-home estimate
• compare the weekly and annual difference

This will help you make a decision based on real numbers, not assumptions or fear.

Final Thought

Choosing to work less is not about giving up ambition. It is about choosing the kind of life you want to live. When you understand how tax brackets work and how little difference some of your highest-taxed income makes to your actual take-home, the question becomes much clearer.

For many professionals, the aim is no longer to maximise income. It is to maximise freedom.

This article, along with the calculator that will follow, is here to help you explore that choice with clarity and confidence.