Answers · UK 2025/26
How do I avoid the High Income Child Benefit Charge (HICBC) through salary sacrifice in 2026/27?
Salary sacrifice reduces your 'adjusted net income' -- the figure used to calculate HICBC. By sacrificing salary into a pension, or for childcare vouchers or cycle-to-work, you can reduce adjusted net income below £60,000 and eliminate the charge, or below £80,000 to reduce it.
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The High Income Child Benefit Charge (HICBC) applies if you or your partner has 'adjusted net income' over £60,000 in 2026/27. The charge tapers between £60,000 and £80,000, reaching 100% at £80,000 (above which all Child Benefit is effectively clawed back). How salary sacrifice helps: Salary sacrifice reduces your gross pay for income tax and NI purposes, and -- crucially -- it reduces your 'adjusted net income'. Adjusted net income is broadly your total income minus pension contributions and Gift Aid payments. Common salary sacrifice schemes: 1. Pension salary sacrifice: The most powerful tool. Each £1 of salary sacrificed into a pension reduces adjusted net income by £1. Someone earning £75,000 who sacrifices £15,000+ into their workplace pension could bring adjusted net income below £60,000, eliminating HICBC entirely. 2. Cycle-to-work schemes: Salary sacrificed for a bike and equipment reduces adjusted net income. 3. Electric vehicle (EV) leasing via salary sacrifice: Sacrificed amounts reduce adjusted net income and attract low BIK rates (4% in 2026/27). 4. Childcare vouchers (legacy): No longer open to new entrants since 2018, but existing participants still benefit. Calculation example: Earnings: £72,000. Child Benefit claimed: £2,212.60 (2 children). HICBC = 60% of Child Benefit (as income is 60% through the £60k-£80k taper) = £1,327.56. By sacrificing £12,000 into a pension (bringing income to £60,000), HICBC drops to zero. Net saving: £1,327.56 plus NI savings on the sacrifice. Important: Gift Aid donations also reduce adjusted net income. Making charitable donations is another way to reduce HICBC exposure if salary sacrifice is not available. Always confirm your employer's salary sacrifice rules and ensure your adjusted net income calculation accounts for all sources of income, not just employment income.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.