Free Resource: Urban Institute Net Income Calculator

net income example 0Sometimes, it’s hard to know if a refugee family will really be better off if they add additional income to the mix.  “If a low-income family earns more money, how much will the family’s benefits from safety-net programs go down, how much will state and federal income and payroll taxes change, and how much will the family’s total income go up?”

The Net Income Calculator, a user-friendly tool from The Urban Institute gives you the bottom line and makes a complex calculation relatively simple.

How it Works

You first select the variable you want to test – either wages earned or hours worked.  The tool generates scenarios at a few different intervals for comparison.

To test the tool, Higher plugged in numbers for a family of 5 (children ages 10, 4 and 2) living in Texas.  The husband earns $8.00/hour in a full time job.  The wife has the opportunity to add income from a 20 hour a week job earning minimum wage.  The tool requires estimates of unsubsidized monthly rent and total child care costs.

All calculations related to benefit amounts, tax credits and taxes are built into the model.  All of you definitely have enough knowledge to use the tool accurately and you don’t have to be a math whiz, either.

Information it Delivers
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Amount of new earnings “kept” vs “taxed”

Several charts are generated to show you the net impact on family finances at two different levels.  In our example, the levels are 20 and 40 hours a week of added income from the wife’s potential new job.

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Composition of monthly net income for the household

You can see two of the charts delivered for our example at left and below.



This example is consistent with my experience in Austin, TX.  There is less than $100 net increase in family income in adding a parttime job for the wife.  Are there other benefits, including improved English and future work opportunities?  Yes.

Do those outweigh the concerns the family might have about childcare, cultural factors and additional stress?  No matter the support and coaching you provide, the final decision is up to the family.




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