There is a stretch of income in Britain where earning more can leave a family barely better off, and it has nothing to do with the famous trap at £100,000. It starts at £60,000 and it is called the High Income Child Benefit Charge.
The charge is not a tax on Child Benefit exactly. It is a clawback. If the higher earner in a household has an adjusted net income above £60,000, HMRC takes back 1% of the family's Child Benefit for every £200 of income above that line. Divide the gap by 200 and you have the percentage gone. By £80,000 the whole award has been reclaimed.
What the award is worth in 2026/27
Child Benefit rose on 6 April 2026. It now pays £27.05 a week for the eldest or only child, which is £1,406.60 a year, and £17.90 a week for each additional child, or £930.80 a year. A family with two children receives £2,337.40 a year. There is no limit on the number of children you can claim for.
Those numbers matter because the clawback is proportional to the award. The more children you have, the steeper the charge, and the more punishing that £60,000 to £80,000 band becomes.
The marginal rate nobody quotes
Spread the clawback across the £20,000 band and it behaves exactly like an extra tax rate. One child adds 7.03% to the rate on every pound in the band. Two children add 11.69%. Three add 16.34%.
Stack that on the tax a higher-rate taxpayer already pays and the real number gets uncomfortable. At £70,000 with two children, income tax and National Insurance alone take 42.0% of the next pound. Add the Child Benefit clawback and it is 53.7%. Add a Plan 2 student loan and you are handing over 62.7% of every extra pound you earn.
"A pay rise inside this band is worth less than a third of its headline value to a family with two children and a student loan."
Related tool
Model the charge against your own salary
The High-Earner Optimiser handles the Child Benefit charge and the £100,000 allowance taper together, and finds the pension contribution that escapes both.
Open the High-Earner Optimiser →Adjusted net income is the number you can change
The charge is assessed on adjusted net income, not gross salary, and that distinction is the whole opportunity. Pension contributions reduce it. Gift Aid donations reduce it. Salary sacrifice reduces it before the money ever reaches you.
So a household at £72,000 with two children is not stuck. Paying enough into a pension to bring adjusted net income back to £60,000 reclaims the entire award. The contribution buys higher-rate relief on the way in and cancels a clawback on the way out, which is why the effective return on that particular pension payment is far higher than the headline relief suggests.
Claim it even when you expect to repay it
This is the part that costs families real money. Plenty of higher earners never claim Child Benefit at all, reasoning that they would only hand it back. The claim itself does two things that have nothing to do with the payment.
It credits National Insurance towards the state pension for a parent who is not working or is earning below the threshold, which protects qualifying years that cannot easily be bought back later. It also triggers a National Insurance number for the child automatically at 16. You can register the claim and elect not to receive the payments, which keeps the credits and removes the charge entirely.
If you do take the payments and the charge applies, it is collected through Self Assessment. Since 2025 there has also been an option to have it collected through PAYE instead, which avoids filing a return purely for this.