Child Benefit Calculator

The £60,000 Trap: Why Parents Earning More Are Keeping Less

There is a tax trap in the UK system that punishes success so severely it creates one of the highest marginal tax rates in the world.

It’s called the High Income Child Benefit Charge (HICBC).

For decades, Child Benefit was a universal right—a simple recognition that raising the next generation costs money. But today, it is a means-tested minefield.

If one parent in a household earns over £60,000, the government begins to claw back the benefit. By the time that parent earns £80,000, the benefit is gone entirely.

Crucially, this is based on individual income, not household income. Two parents earning £59,000 each (Total: £118,000) keep every penny. A single parent earning £61,000 starts to lose it.

We built the Child Benefit Calculator (above) to help you visualize exactly how much of your benefit you are losing—and crucially, how to get it back using Adjusted Net Income.

What is the “Clawback”?

The charge is a sliding scale.

• Between £60k and £80k: For every £200 you earn over £60,000, you have to pay back 1% of your Child Benefit.
• Over £80k: You pay back 100%.

For a family with two children, the Child Benefit is worth £2,212.60 a year. Losing this effectively wipes out a significant chunk of a pay rise.

How to Use the Calculator

This tool acts as a tax efficiency planner for parents.

Step 1: The Family Count (Tab 1) Use the slider to set the number of children.

• The Value: See instantly what the gross annual payout is. For 3 children, it’s over £3,000 tax-free cash. That is a serious amount of money to lose.

Step 2: The “Highest Earner” Test (Tab 2) Enter the salary of the highest earner.

• The Reality Check: If you earn £65,000, you might think you are “safe” because you aren’t at the £80k limit. Run the calculation. You will see a “Tax Charge” appearing in red. That is money you must pay back via Self Assessment.

Step 3: The Pension “Magic Trick” (Tab 3) This is the secret weapon of the wealthy.

• The charge is based on Adjusted Net Income. This means your salary minus pension contributions.
• Try this: If you earn £65,000, enter £5,000 into the “Pension Contributions” box.
• Watch what happens: Your Adjusted Net Income drops to £60,000. The “Tax Charge” bar disappears. You keep the full Child Benefit and you have boosted your retirement pot.

Why You Should Still Claim (Even if you pay it back)

Many high earners simply stop claiming Child Benefit to avoid the hassle of the tax return. This is a mistake.

1. National Insurance Credits: The claimant (usually the mother) receives NI credits towards their State Pension. If one parent stays home and doesn’t claim, they could lose thousands in future pension payments.
2. Teenage NI Numbers: When your child turns 16, they automatically receive their National Insurance number ifChild Benefit was claimed for them. If not, they face administrative hurdles.

The Verdict

The High Income Child Benefit Charge is a “fiscal drag” that catches thousands of middle-class families every year. But it is not a fixed penalty; it is a variable you can control.

Don’t let the taxman take your family’s allowance by default. Use the Child Benefit Calculator above to plan your income, boost your pension, and keep what is yours.