Payroll Giving
Payroll Giving provides tax relief at source for individuals who give to charity by direct deduction from their pay. Pensioners can also use Payroll Giving to give to charity by direct deduction from their occupational pension.
Any employee whose employer deducts Income Tax under PAYE and who has contracted with a Payroll Giving Agency can give to charity direct from their salary.
Once an employee has signed up to the scheme the employer deducts the authorised amount from the employee’s pay before deducting tax under PAYE and sends the payment to the agency charity.
There is no limit on the amounts that an employee can give from their pay.
Find out more from HMRC here
Why Payroll Giving and not Gift Aid?
Gift Aid adds 25% onto your donation, but this is on your donation which you have already paid tax on. If you are a higher rate tax payer your tax payment will be greater than the 25% boost from the government. Payroll Giving means your donation is taken before you pay tax, so your donation goes further.
|
Cost to 20% tax payer |
Cost to 40% tax payer |
Cost to 45% tax payer |
Monthly donation received by Charity |
|
£8 |
£6 |
£5.50 |
£10 |
|
£20 |
£15 |
£13.75 |
£25 |
|
£40 |
£30 |
£27.50 |
£50 |
How to make your donation stretch even further - matched funding
Many companies offer matched funding and will match your donation via Payroll Giving. This can ensure your donation make even more of a difference. See if your organisation is listed here as one that offers matched funding, or speak to your HR team for the most up to date information. The illustration below shows what a difference Payroll Giving and matched funding can make.
What do I need to do?
Does your company offer matched funding?
YES
Speak to your HR team - do they offer Payroll Giving and do they have a contract with an agency? Even if you are a lower rate tax payer, Payroll Giving with matched funding will ensure the maximum amount goes to your charity
NO
1) Are you paid via PAYE and are you a higher rate tax payer? Then speak to your HR team - do they offer Payroll Giving and do they have a contract with an agency?
2) Are you a lower rate tax payer or not paid via PAYE? Then keep claiming Gift Aid. You can do this directly with us or through Just Giving / Local Giving which will give you the option to apply gift aid
