High Income Child Benefit Charge: how it is worked out and cut

How the High Income Child Benefit Charge is calculated

The High Income Child Benefit Charge takes back 1% of your family's Child Benefit for every £200 of adjusted net income you have over £60,000, and all of it once your income reaches £80,000. These limits have applied since 6 April 2024 (the 2024/25 tax year) and still apply in 2026/27.

According to GOV.UK, you pay back 1% of your Child Benefit for every £200 you earn over the threshold. Its own example: adjusted net income of £67,600 is £7,600 over £60,000, and 7,600 divided by 200 is 38, so you pay back 38%.

The law adds two rounding rules that most guides leave out. Section 681C of the Income Tax (Earnings and Pensions) Act 2003 says the percentage is rounded down to a whole number, and the charge itself is rounded down to a whole pound. So £60,199 of income gives a charge of 0%, and £60,200 gives 1%.

The calculation has three steps:

1. Work out your adjusted net income for the tax year (6 April to 5 April).
2. Take off £60,000, divide by 200 and round down. That is your percentage, capped at 100%.
3. Apply that percentage to the Child Benefit paid for the weeks in the tax year, and round down to the pound.

To see what the charge does to your own take-home pay, tick the Child Benefit box in the pay rise calculator, which shows your net pay with the charge taken off, before and after a rise.

Child Benefit rates for 2026/27 and the charge at each income

Child Benefit for 2026/27 is £27.05 a week for the eldest or only child and £17.90 a week for each other child, from 6 April 2026. HMRC's announcement of 31 March 2026 gives the yearly figures as £1,406.60 for the first child and £930.80 for each additional child, so 2 children bring in £2,337.40 a year.

The table shows the charge at points across the £60,000 to £80,000 band, using 52 weeks of Child Benefit at the 2026/27 rates. The figures come from the site's pay rise engine, before the final rounding down to whole pounds.

Child Benefit is usually paid every 4 weeks, so the exact amount in a tax year depends on the payment dates. The charge is based on the Child Benefit for weeks in that tax year, and it can never be more than the Child Benefit received.

Adjusted net income is your taxable income less pension contributions and Gift Aid

Adjusted net income is your total taxable income before the Personal Allowance, less certain reliefs such as pension contributions and Gift Aid. It is not your salary, and it is not your take-home pay.

According to HMRC's adjusted net income guidance, you add up your taxable income, including:

• pay from employment, including taxable benefits from your job such as a company car;
• self-employed profits;
• most pensions, including the State Pension;
• savings interest and dividends;
• rental income and income from a trust.

You then take off pension contributions paid gross, trading losses, and the grossed-up amount of Gift Aid donations and relief at source pension contributions. For every £1 you give through Gift Aid or pay into a relief at source pension, you take £1.25 off.

HMRC's worked example: Clara has £65,000 of pay and £5,000 of bank interest, total £70,000. She pays £4,750 into a pension without tax relief, leaving £65,250. She gives £1,000 through Gift Aid, which takes off £1,250. Her adjusted net income is £64,000, so her charge is 20% of the Child Benefit.

Pension contributions taken from your pay before tax (a net pay scheme) or through salary sacrifice already reduce the pay figure on your P60, so you do not take them off a second time.

Worked example: a £70,000 salary with 2 children

A £70,000 salary with 2 children and no pension contributions gives a High Income Child Benefit Charge of £1,168.70 in 2026/27, which is 50% of the £2,337.40 Child Benefit. The law rounds that down to £1,168.

These figures come from the site's pay rise engine for an employee in England, Wales or Northern Ireland, 2026/27 rates, no student loan:

The family still gains from claiming: £2,337.40 arrives, £1,168.70 goes back, and £1,168.70 stays. Below £80,000 of adjusted net income, claiming and paying the charge always leaves you better off than not claiming.

The same engine shows what a rise into the band costs. A pay rise from £65,000 to £70,000 adds £2,315.65 a year to take-home pay after the charge, 46.3% of the £5,000 rise, because the charge rises from £584.35 to £1,168.70. Reproduce this in the pay rise calculator with a £65,000 salary, a 7.6923% rise, Child Benefit ticked and 2 children. The guide to take-home pay after a rise explains the rest of the sum.

The effective tax rate between £60,000 and £80,000 is 49% to 60%

Inside the £60,000 to £80,000 band, each extra £200 of income costs 40% Income Tax, 2% National Insurance and 1% of your Child Benefit, which gives an effective marginal tax rate of about 53.7% with 2 children in England. The more children, the higher the rate.

The table uses the site's engine: the take-home pay lost from £200 of extra salary at £70,000, with the charge included.

In Scotland the charge is the same, because it is a UK-wide charge on adjusted net income, but Scottish higher rate tax is 42% on income from £43,663 to £75,000 in 2026/27. Above £75,000 the Scottish advanced rate of 45% applies, which pushes the effective rate higher again for the last £5,000 of the band.

The rate is this high only inside the band. Above £80,000 the charge is fixed at 100% of your Child Benefit and the rate drops back to 42%. The next steep band starts at £100,000, where the Personal Allowance taper creates a 60% rate; the £100k tax trap guide covers that band.

How to reduce the charge with pension contributions

Paying into a pension is the most common way to cut the High Income Child Benefit Charge, because every pound of gross pension contribution takes a pound off your adjusted net income. A £5,000 pension contribution on a £65,000 salary brings adjusted net income down to £60,000 and removes the charge completely.

The site's engine gives these figures for a £65,000 salary with 2 children, 2026/27, with the £5,000 taken through a net pay workplace scheme:

Your take-home pay falls by £2,415.65, but £5,000 goes into your pension. The £2,584.35 difference is £2,000 of Income Tax saved plus the £584.35 charge you no longer pay. Each pound in the pension costs you about 48p. Enter a £65,000 salary and a 7.6923% pension in the UK salary take-home calculator to check the tax and National Insurance lines.

The result is the same with a personal or relief at source pension, but the steps differ. You pay £4,000, the provider adds £1,000 of basic rate relief, and the grossed-up £5,000 comes off your adjusted net income. You then claim the extra £1,000 of higher rate relief from HMRC. The pension tax relief guide shows how to claim it.

Salary sacrifice works too, and also saves National Insurance, because your salary itself goes down. The salary sacrifice guide covers the trade-offs, including the planned £2,000 National Insurance limit from April 2029.

Gift Aid donations also lower adjusted net income

A Gift Aid donation reduces your adjusted net income by the grossed-up amount, which is what you gave plus 25%. Giving £800 to charity through Gift Aid takes £1,000 off your adjusted net income.

On a £65,000 salary with 2 children, that £1,000 cut moves adjusted net income to £64,000 and the charge from 25% to 20% of Child Benefit. Using the engine's figures, the charge falls from £584.35 to £467.48, a saving of £116.87. As a higher rate taxpayer you also claim £200 of extra relief on the donation (the difference between 40% and 20% on £1,000) through Self Assessment or by asking HMRC to adjust your tax code.

So the £800 donation costs you £483.13 once the charge saving and higher rate relief are counted, and the charity receives £1,000. Gift Aid only makes sense if you want to give to charity anyway; it is not a way to keep money.

Who pays the charge: the higher earner, whoever claims

The High Income Child Benefit Charge is paid by the partner with the higher adjusted net income, even if the other partner is the one who receives the Child Benefit. Only individual incomes count, so a couple on £55,000 each pays nothing, while a single earner on £70,000 pays.

According to GOV.UK, a partner is someone you are not permanently separated from and who you are married to, in a civil partnership with, or living with as if you were. So the charge applies to unmarried couples who live together. It can also apply if someone else claims Child Benefit for a child who lives with you and you contribute at least an equal amount towards the child's upkeep, even if the child is not yours.

After a separation, the charge applies up to the date you permanently separate. If you move in with a new partner who gets Child Benefit, it applies from the date you move in together. Short periods apart, such as a hospital stay or working away, do not count as separation.

If you cannot get the information from your partner or ex-partner, you can write to HMRC at Pay As You Earn and Self Assessment, HM Revenue and Customs, BX9 1AS. HMRC will reply yes or no to whether they get Child Benefit or have a higher income than you, and will not give any financial details. You can only ask if you live together or separated in the tax year you are asking about.

Paying the charge through PAYE, without a tax return

Since 2025, employed people and those with a workplace or private pension can pay the High Income Child Benefit Charge through their tax code instead of registering for Self Assessment. HMRC announced the service on 21 July 2025, and GOV.UK's pay through PAYE page was live when checked on 27 September 2026.

According to GOV.UK, you can use the PAYE route only if all of these apply:

• you do not need to send a tax return for another reason, such as self-employment;
• you are paying the charge for the current or previous tax year onwards;
• it is on or before 31 January after the tax year you are paying for.

For 2025/26, that means you can register through PAYE up to 31 January 2027. You sign in with your HMRC account and need your adjusted net income, your partner's adjusted net income, the National Insurance number of any partner who received Child Benefit in the last tax year, and the dates of those relationships. The service cannot save your progress, so gather these first.

HMRC then sends a new tax code to you and your employer or pension provider, and the charge comes out of your pay through the year. Check the code with the tax code checker when it arrives. If you already file a tax return only for this charge, you can phone HMRC to leave Self Assessment and move to PAYE.

Paying the charge through Self Assessment: 5 October and 31 January

You must pay the charge through Self Assessment if you already need a tax return, for example because you are self-employed or have untaxed savings income, or if it is later than 31 January after the tax year. If you do not usually send a return, you must register by 5 October after the end of the tax year.

On the return you enter the Child Benefit received and the number of children, and the charge is added to your Income Tax bill. It is a charge to Income Tax under section 681B of the Income Tax (Earnings and Pensions) Act 2003, so it forms part of the bill that payments on account are based on. According to GOV.UK, you do not make payments on account if your last Self Assessment bill was under £1,000 or you paid more than 80% of your tax through your tax code.

GOV.UK warns you may get a penalty if you need to pay through Self Assessment but do not register, or do not declare Child Benefit on your return.

Opting out of Child Benefit payments, and the National Insurance credits risk

If your adjusted net income is over £60,000, you can opt out of Child Benefit payments and pay no charge, while staying registered for Child Benefit. Opting out is not the same as not claiming, and the difference matters for the State Pension.

According to GOV.UK, a claim you have opted out of still gives:

• National Insurance credits for the person who claims, while the child is under 12, which count towards the State Pension;
• a National Insurance number for your child, sent shortly before they turn 16.

The risk is with a parent who stays at home or earns too little to pay National Insurance. If nobody claims, that parent gets no credits and can end up with gaps in their record. Make the claim in the lower earner's name and tick the option not to have the benefit paid.

Opting out only makes financial sense at £80,000 or more of adjusted net income, where the charge equals the benefit. Between £60,000 and £80,000 you keep some of the money by claiming. You can restart payments at any time; the Child Benefit Office says the first payment can take up to 28 days. You must still pay any charge for payments you received up to the date they stopped.

If you missed the charge in past years

If you should have paid the charge for past years and did not, tell HMRC now, because HMRC can assess past years and add penalties and interest on the tax you owe.

Under the Taxes Management Act 1970, HMRC can normally make an assessment up to 4 years after the end of the tax year (section 34), up to 6 years where the loss of tax was careless, and up to 20 years where it was deliberate or came from a failure to notify chargeability (section 36). The threshold for years up to and including 2023/24 was £50,000, with 1% repaid for every £100 over it, so older years use the old rules.

You cannot pay a past year through PAYE after 31 January following that year; those years go through Self Assessment or HMRC's own assessment. If you cannot pay the bill in full, GOV.UK says you may be able to set up a payment plan to pay it in monthly instalments, which HMRC checks is affordable.

What has changed, and what has not

The High Income Child Benefit Charge is still based on individual income in 2026/27. In the Autumn Budget 2024, the government said it would not proceed with the reform to base the charge on household incomes, which the previous government had planned for April 2026.

According to HMRC's Autumn Budget 2024 overview of tax legislation and rates, the government instead allowed employed people to report Child Benefit payments through their tax code from 2025, and said it would pre-populate Self Assessment returns with Child Benefit data for those not using that service.

Section 681C of the Income Tax (Earnings and Pensions) Act 2003, as shown on legislation.gov.uk on 27 September 2026, still sets the threshold at £60,000 and the step at £200. Treat any claim that the charge has been scrapped as unconfirmed until GOV.UK says so.

What to do next

Start with your adjusted net income for 2026/27. If it will be over £60,000:

1. Run your salary through the pay rise calculator with Child Benefit ticked to see the charge and your take-home pay.
2. Decide whether a pension contribution, salary sacrifice or Gift Aid would bring your adjusted net income down, and by how much.
3. If you are employed and file no tax return, register to pay through PAYE on GOV.UK.
4. If you owe the charge for 2025/26 and need Self Assessment, register by 5 October 2026 and file by 31 January 2027.
5. If your income is £80,000 or more, consider opting out of payments, but keep the claim open for the National Insurance credits.