The Child Benefit 60% trap: High Income Child Benefit Charge explained

How Child Benefit works in 2026/27

Child Benefit is a regular payment from the government to help with the cost of raising children. In 2026/27 it is paid at £27.05 per week for the first (or only) child and £17.90 per week for each additional child. That works out to £1,406.60 per year for one child and £2,337.40 per year for two children. It is usually paid every four weeks into your bank account, and the person claiming it also earns National Insurance credits that count toward their State Pension — which is why opting out is rarely a good idea for the lower-earning parent, even if the household income is high.

Child Benefit is not means-tested at the point of claim — anyone can apply. But since 2013, a separate tax charge called the High Income Child Benefit Charge has clawed it back from households where one person earns over £60,000 (the threshold was raised from £50,000 in April 2024). The charge is based on the highest earner's income, not the household's combined income — so a family with two earners on £59,000 each pays no charge, while a family with one earner on £70,000 does.

GOV.UK — Child Benefit · 2026/27 rates

The HICBC taper: £60,000 to £80,000

The charge is calculated as a percentage of the Child Benefit you (or your partner) have received. The percentage is 1% for every £200 of your adjusted net income above £60,000, rounded down to the nearest £200. So at £62,000 the charge is 10% of your Child Benefit; at £70,000 it is 50%; at £80,000 it is 100% — the entire Child Benefit is clawed back. Above £80,000 the charge stays at 100% (it cannot exceed the Child Benefit received).

"Adjusted net income" is your total taxable income minus certain deductions: pension contributions (gross), Gift Aid donations (grossed up), and trading losses. This is important because it means you can reduce your adjusted net income — and therefore the HICBC — by paying more into your pension or making Gift Aid donations, even if your gross salary is unchanged.

GOV.UK — High Income Child Benefit Charge · 2026/27

Why the marginal rate approaches 60%

Your marginal tax rate is the percentage of every extra £1 you earn that goes to the taxman. Between £60,000 and £80,000, a higher-rate taxpayer pays:

• 40% income tax on the slice above £50,270
• 2% National Insurance on earnings above £50,270
• The HICBC taper: 1% of your annual Child Benefit for every £200 of extra income

For a family with two children, the annual Child Benefit is £2,337.40. One per cent of that is £23.37 — so for every extra £200 earned, you lose £23.37 of Child Benefit, equivalent to an 11.7% marginal rate from the HICBC alone. Add 40% income tax and 2% NI, and the total marginal rate is about 54%. For three children it rises to around 58%, and for four or more children it exceeds 60% — which is where the "60% trap" name comes from. Even for one child, the marginal rate is roughly 49%, well above the 40% headline higher rate. Above £80,000 the taper ends and the marginal rate drops back to 42% (40% tax + 2% NI), since the HICBC is fully charged but no longer increases with income.

Worked example: £70,000 salary, two children

Take a single-earner family with two children and a salary of £70,000. Their Child Benefit for the year is £2,337.40. Their adjusted net income is £10,000 above the £60,000 threshold, so the HICBC is 50% × £2,337.40 = £1,168.70. They keep £1,168.70 of Child Benefit and pay £1,168.70 back as a tax charge (usually through Self Assessment).

Now consider a £10,000 pay rise from £70,000 to £80,000. The extra £10,000 is taxed at 40% (£4,000) plus 2% NI (£200), and the HICBC rises from 50% to 100% — an extra £1,168.70 charge. Total extra tax and charges on the £10,000 rise: £5,368.70. That is a marginal rate of about 54%, leaving £4,631.30 of the £10,000 pay rise. Use our child benefit charge calculator to model your own income and family size.

How to reduce or avoid the charge

There are several legitimate ways to reduce your adjusted net income and bring it back below £60,000 (or at least reduce the taper):

Pension contributions are the most powerful tool. Contributions to a workplace or personal pension reduce your adjusted net income pound for pound (gross). If you earn £70,000 and pay £10,000 into your pension, your adjusted net income drops to £60,000 and the HICBC falls to zero — you keep the full Child Benefit and get 40% tax relief on the contribution. This is one of the few situations where a pension contribution can effectively pay for itself. Use our pension calculator to see the impact.

Gift Aid donations also reduce adjusted net income (the gross value of the donation is deducted). If you give to charity anyway, making the donation under Gift Aid can knock money off your HICBC at the same time. Salary sacrifice arrangements (for pensions, electric cars or cycle-to-work) reduce your gross salary before tax, which also lowers adjusted net income.

Income splitting between spouses or civil partners can help if one partner earns below £60,000. If the higher earner can shift some income (for example, through a partnership or by putting savings in the lower earner's name), the household may avoid the charge entirely. This is more complex and depends on your circumstances — professional advice is worth it.

Finally, you can opt out of Child Benefit entirely to avoid having to file a Self Assessment return. But this is usually only sensible if your income is permanently above £80,000 and you do not need the National Insurance credits — for most people in the taper zone, claiming and paying the charge (or reducing it via pension) is better than opting out.

Frequently asked questions

Sources

• GOV.UK — Child Benefit (rates and eligibility, 2026/27)
• GOV.UK — High Income Child Benefit Charge (taper rules and thresholds, 2026/27)
• GOV.UK — Income Tax rates (40% higher rate and £50,270 threshold, 2026/27)