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Second Income Requirement Calculator

Work out second income requirement instantly with clear inputs, formula shown and shareable results.

About Second Income Requirement Calculator

A second income must be grossed up for tax, because only the net amount closes the household gap. Including the savings target in the requirement prevents the second income from simply funding higher spending.

Formula

Second income

Gross needed = (expenses + savings target - primary income) / (1 - tax rate)

Worked example

With the default values below, Second Income Requirement Calculator returns Gross Second Income Needed of $75,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Monthly Household Expensesminimum 0
140,000
Primary Monthly Incomeminimum 0
110,000
Monthly Savings Targetminimum 0
30,000
Tax Rate On The Second Incomeaccepts 0–60 %
20 %

Results

Gross Second Income Needed
$75,000.00
Net Shortfall To Cover
$60,000.00
Tax On The Second Income
$15,000.00
Annual Gross Requirement
$900,000.00

Step by step

  1. 1Values used
  2. 2Second income
  3. 3Gross Second Income Needed= 75,000.00
  4. 4Net Shortfall To Cover= 60,000.00
  5. 5Tax On The Second Income= 15,000.00
  6. 6Annual Gross Requirement= 900,000.00

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation or compounding frequency into account.
  • Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • Figures are estimates for planning only. Prices, returns, inflation and personal circumstances all change. This is not financial or tax advice — speak to a qualified adviser before making decisions.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Figures are estimates for planning only. Prices, returns, inflation and personal circumstances all change. This is not financial or tax advice — speak to a qualified adviser before making decisions.

Frequently Asked Questions

Why gross up for tax?

Because the shortfall is a net figure. A 20% tax rate means a quarter more must be earned than the gap.

What costs come with a second income?

Commuting, childcare and convenience spending can consume a large share, so net contribution should be tested honestly.

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