Child Benefit Tax at £65,000 — 2 children
At £65,000 income with 2 children, £563/year of your child benefit is charged back (25% of £2251.60).
HICBC calculation — £65,000 / 2 children
| Item | Amount |
|---|---|
| Adjusted net income | £65,000 |
| Income above £60,000 threshold | £5,000 |
| Charge percentage (£5000 ÷ 200 = 25, capped at 100%) | 25% |
| Annual child benefit (2 children) | £2251.60 |
| HICBC charge (25% of £2251.60) | −£563 |
| Net child benefit retained | £1688.60 |
Reduce your charge with pension contributions
Pension contributions reduce your adjusted net income — the figure used to calculate the HICBC. Contributing £5,000 to a pension would bring your adjusted net income down to £60,000, eliminating the £563/year charge entirely. Even a smaller contribution reduces the charge proportionally. Salary sacrifice pension contributions also save National Insurance.
HICBC taper — £60,000 to £80,000 (2 children)
| Income | Charge % | Charge Amount | Net Benefit |
|---|---|---|---|
| £60,000 | 0% | — | £2251.60 |
| £62,000 | 10% | −£225 | £2026.60 |
| £64,000 | 20% | −£450 | £1801.60 |
| £65,000 ← you | 25% | −£563 | £1688.60 |
| £68,000 | 40% | −£901 | £1350.60 |
| £70,000 | 50% | −£1126 | £1125.60 |
| £72,000 | 60% | −£1351 | £900.60 |
| £75,000 | 75% | −£1689 | £562.60 |
| £78,000 | 90% | −£2026 | £225.60 |
| £80,000 | 100% | −£2252 | £0 |
Child benefit tax at £65,000 with 2 children
With an adjusted net income of £65,000 and 2 children, your annual child benefit is £2251.60. The High Income Child Benefit Charge applies at 25%, meaning you must pay back £563 through Self Assessment. Your net child benefit after the charge is £1688.60/year (£32.47/week).
The charge is calculated as 1% of child benefit for every £200 of income above the £60,000 threshold. Your income of £65,000 is £5,000 above the threshold, giving a charge percentage of 25%.
How to reduce your High Income Child Benefit Charge
The most effective way to reduce the HICBC is to reduce your adjusted net income through pension contributions. To eliminate your £563 charge entirely, you would need to contribute £5,000 to a pension, bringing your adjusted net income down to £60,000. Every £200 of pension contribution reduces your charge by 1% of your child benefit (£22.52). Gift Aid donations also reduce adjusted net income, providing another way to lower the charge.
Frequently asked questions
What is the High Income Child Benefit Charge?
The High Income Child Benefit Charge (HICBC) is a tax charge that claws back child benefit when the highest earner in a household has adjusted net income above £60,000. It is calculated as 1% of child benefit received for every £200 of income above £60,000, reaching 100% clawback at £80,000.
At what income is all child benefit charged back?
£80,000. Since April 2024, the full clawback point is £80,000 adjusted net income. Below that, you keep a portion of your child benefit. At £65,000, the charge is 25% — so you pay back £563 and keep £1688.60/year.
How do I pay the High Income Child Benefit Charge?
You pay the HICBC through a Self Assessment tax return. If you do not already complete Self Assessment, you must register with HMRC before 5 October following the end of the tax year. Alternatively, HMRC can collect the charge through your PAYE tax code — contact HMRC to arrange this.
Can pension contributions reduce my HICBC?
Yes. Pension contributions (including salary sacrifice) reduce your adjusted net income, which is the figure used to calculate the HICBC. At £65,000, contributing £5,000 to a pension would reduce your adjusted net income to £60,000, eliminating the charge entirely and saving you £563/year in child benefit charges. This makes pension contributions especially tax-efficient for earners in the £60,000–£80,000 band.
Should I opt out of child benefit to avoid the charge?
At £65,000, you still receive £1688.60/year in net child benefit after the charge. It is generally worth continuing to receive child benefit, as opting out only avoids the admin — you would also lose the £1688.60 net benefit. Only consider opting out if your income is comfortably above £80,000.
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