Payroll Giving
Payroll Giving is a tax-efficient way for employees to give to charity, directly from their salary, before tax is deducted. The charity gets more from each donation, without reducing the amount the employee takes home in their payslip. This means that people who work hard and want to do good in the world can make an even bigger difference to the charities close to their hearts.
Payroll Giving – the process
You select the charity (or charities) that you wish to support, and the amount you wish to donate to each of them. This amount is deducted from your gross salary by your payroll department, before income tax is calculated, so you pay less income tax to the tax man, and your chosen charities will receive more.
Let’s talk real numbers. If you want to make a £10 donation to Charity X, you could actually give £12.50, £16.66 or £18.18, depending on your tax bracket, and it will still only cost you £10 in real terms. Here’s how:
Payroll Giving – 20% income tax band
If you want to make a £10 donation to Charity X and you usually pay 20% income tax, you can set up a £12.50 payroll giving donation. This would mean that your employer will deduct £12.50 from your gross pay, and £12.50 will be sent to your chosen charity, but your net pay will only be reduced by £10.
The charity will not need to claim the tax benefit from HMRC, saving them time and money in administration, and an extra £2.50 is added to your £10 donation, making the total donation £12.50.
Payroll Giving – 40% income tax band
If you want to make a £10 donation to Charity X and you usually pay 40% income tax, you can set up a £16.66 payroll giving donation. This would mean that your employer will deduct £16.66 from your gross pay, and £16.66 will be sent to your chosen charity, but your net pay will only be reduced by £10.
The charity will not need to claim the tax benefit from HMRC, saving them time and money in administration, and an extra £6.66 is added to your £10 donation, making the total donation to £16.66.
Payroll Giving – 45% income tax band
If you want to make a £10 donation to Charity X and you usually pay 45% income tax, you can set up a £18.18 payroll giving donation. This would mean that your employer will deduct £18.18 from your gross pay, and £18.18 will be sent to your chosen charity, but your net pay will only be reduced by £10.
The charity will not need to claim the tax benefit from HMRC, saving them time and money in administration, and an extra £8.18 is added to your £10 donation, making the total donation to £18.18.
Can anyone use Payroll Giving?
- Are over 18 years old?
- Are you are a Pay As You Earn (PAYE) employee?
- Is your employer registered with a Payroll Giving Agency?
If you can answer yes to all three questions, then you can make impactful donations via Payroll Giving! With GoodPAYE, it is super simple and easy to give via Payroll Giving, and it is the most efficient way to make charitable donations.
Can I give to any charity through Payroll Giving?
Yes, you can donate to any national or local charity, from poverty, to education, animals, the environment, health or anything else that interests you, even a small local charity.
Is there a minimum or maximum amount I have to give?
No, there is no upper or lower limit to your donation amount. You can give as much or as little as you like to your chosen charities.
Can I stop giving when I want to?
Of course. If you leave your place of work, your giving will automatically end, and you can restart in your new place of work. You can also log in to GoodPAYE at any time to stop or amend your donations. You can choose a different charity to support or change the amount you donate at any time. You are in complete control of your giving – it’s in your hands.