The charge at £70,000, by number of children
The charge is 50% of the Child Benefit claimed, because adjusted net income is £10,000 above the £60,000 threshold and the charge rises 1% for every £200 above it. It reaches 100% at £80,000.
| Children | Child Benefit a year | Charge (50%) | Kept after the charge |
|---|---|---|---|
| 1 | £1,407 | £703 | £703 |
| 2 | £2,337 | £1,169 | £1,169 |
| 3 | £3,268 | £1,634 | £1,634 |
The pension contribution that keeps your Child Benefit
Adjusted net income falls pound for pound with a gross pension contribution. Bringing it to £60,000 removes the charge in full, so a contribution of about £10,000 at £70,000 keeps all of your Child Benefit and cuts your income tax at the same time.
| Two children | |
|---|---|
| Gross pension contribution | £10,000 |
| Child Benefit charge removed | £1,169 |
| Income tax relief on the contribution | £4,000 |
| Total gain | £5,169 |
| Real cost of the £10,000 in your pension | £4,831 |
In other words, £10,000 goes into your pension but the charge removed and the tax relief mean it costs about £4,831 of take-home pay. The Child Benefit charge calculator runs your own figures, including a bonus or company car.
Take-home pay at £70,000
On the standard tax code with no pension, £70,000 takes home about £51,157 a year, or £4,263 a month, before any Child Benefit charge. If the £10,000 is given up by salary sacrifice to escape the charge, taxable pay falls to £60,000 and take-home is about £45,357 a year, with the Child Benefit kept in full and the pension built up on top. The take-home pay calculator shows the detail.
What counts towards the £60,000 threshold
The charge is based on adjusted net income, not salary alone. It is total taxable income, including a bonus, a company car and other benefits in kind, savings interest and dividends, minus gross pension contributions and Gift Aid donations. Someone on a £70,000 salary with a company car can therefore face a larger charge than the salary suggests, and a pension contribution is the main way to bring the figure back down. The adjusted net income calculator works it out.