I work 75% of full time; in Sweden that means 30h/week. As an IT professional I easily make a living, and were I to work full time my income would be high enough that state income tax would kick in. But my employer would also pay more towards my pension.
I'll come back to these two points in a bit, but for now let's talk about why I work part time.
Parental leave is quite generous in Sweden. For each child the parent(s) get 400 days of paid leave to divide between them and distribute as they see fit. A vast majority of those days the government pays 80% of the parent's salary, although a small portion of them it only pays out a symbolic subsidy. There's a maximum sum too, of course (if you normally make $1,000/day you won't be paid $800/day...), and some other rules regarding when and how you can use your days.
But anyway! Suffice to say that I was really bad at being on parental leave when my first two children were very young. Thus, as my third was born I had a lot of days left to use up. And I did!
First of all I took three months off right away, together with my wife. After that I worked half time for... I don't even remember, but a very long time. That was quite possibly the best thing I have ever done. My family has never been as happy as we were at that time. We just had so. much. time.
Fast forward a couple of years or so and I realised I didn't have an endless amount of parental leave days. I decided to work 75%, and did so until I had no more days to spend. At that time I asked my employer for 20% indefinite unpaid leave, which I was granted. That meant I worked 32h/week, but I was also starting to look for a new job.
A year ago I was hired by my current employer. I told them right off the bat that I don't really want to work more than 30h/week, and that's what we agreed on. I got a pretty big raise compared to my previous job, and actually make very little less working 30h/week here than I would have had working 40h/week there.
Here's where we get back to the money part a bit more. Because people generally have one thing to say when I tell them I work part time: "yes, it's good to do that while the kids are young. You can always work full time later."
What? I have all this extra time for my kids now. When they don't want to or can spend that time with me anymore, I'll have that time for myself and my wife. Why oh why would I work full time ever again?
Because money, of course. Specifically because of pension.
Here's the thing: working 30h/week I still (as of writing this) earn 20% more than the median income (in 2019) in Sweden. Granted that statistic is a little dated, but the 2020 numbers aren't likely to be much higher.
And people keep telling me that "if you work less than full time you get less pension". This is true to an extent, but it's also a giant fallacy as an argument.
Of course, my income would be higher if I worked more. But I shouldn't worry about how much less pension I get compared to a theoretical maximum. I should worry about my quality of life as a parent, worker, and eventually a retiree.
I have a limited time to spend on this Earth, and I don't really know when it's gonna be up. That means I have to weigh current happiness and quality of life against the prospect of future happiness and quality of life. I find that working 75% allows me a nice balance there. I'd like to work even less, but I also like my job and colleagues and sometimes job satisfaction suffers when I work less. Sure, my pension is going to be lower than it potentially could be, but aside from occassional splurges we actually rarely spend more than one of our two salaries anyway (and my wife makes almost as much as I). A lot of the rest goes into savings. I don't think spending more now would increase my quality of life, and I don't see how even more money would increase my quality of life as a retiree.
In the Swedish tax code you pay income tax to your municipality. Typically around 25-33%, depending on where you live (and how much you make; there's a minimum threshold of income you have to pass, below which the income is not taxed at all) and whether you're a member of the Swedish Church. For me it's usually at the lower end of that spectrum.
There's another threshold too, above which you start paying state income tax. I don't know the exact numbers here, but that threshold is roughly about 60% above the 2019 median income (very close to what I would earn had I been working full time). Above that every penny/krona/euro you make is subjected to roughly 50% income tax (municipal + state).
Here's the thing. A lot of people I know who make enough to be subject to state income tax are quite cynical about money. "There's no use earning this much," they say, because "the government takes it all, anyway!" Another complaint along those lines is "Any yearly increase below amount X is too small to even be noticeable, I'll find another job immediately if I don't get more than that."
This isn't the 1% complaining. This is probably the top 10% or 15% complaining. Meanwhile I know people working night shifts as personal assistance making two thirds of my salary even though they work a lot more. Like, wtf? You make so much money you don't reasonably need all of it and you complain?
My first reaction to this is to say that if you don't want to pay state income tax, just work less. Bonus: you'll have more time.
And they, inevitably, reply "but... my pension will suffer if I work part time!"
Sigh.
Now, and in the future, if you reduce your working hours? If the answer is yes, and you're at least as passionate about your spare time as you are about your job, then start exploring the possibility of working part time.
Think of it as part time retiring. Or just more life time.
It's not about how much money you can potentially have. It's about how little you need.
-- CC0 ew0k, 2021-03-08