How Payroll Giving works
Payroll Giving allows you to make donations to charity directly from your pay packet or occupational pension. The donations are taken before deduction of income tax. Because you give the money before your tax is worked out, you only pay tax on what's left. This means that you get your tax relief on your donation immediately - and at your highest rate of tax.
Who can use Payroll Giving?
You can use Payroll Giving providing both of the following apply:
- you are an employee or you get an occupational pension and your employer deducts tax through the PAYE system
- your employer or pension payer operates a Payroll Giving scheme
If your employer or pension payer does not operate a scheme, you could ask if they would be willing to start one. They can find out about the scheme on HM Revenue & Customs' (HMRC) website.
Alternatively they can call HMRC's Charities helpline on 0845 3020203 (select option five). Lines are open 8.30 am to 5.00 pm Monday to Thursday, 8.30 am to 4.30 pm on Fridays.
Your employer may also qualify for a grant - see the later section 'Payroll Giving Grants for employers'.
How to make a donation using Payroll Giving
You can make a donation by authorising your employer or pension payer to deduct gifts to charity from your salary.
Your employer or pension payer hands over your gift to a government-approved Payroll Giving agency, which then passes the money on to your chosen charity.
Some agencies can provide you with a charity card or cheque book so that you can give directly to any charity whenever you want to.
Payroll Giving and other gifts to charity
Payroll Giving does not affect any other donations you might want to make to charity. You can, for example, make other donations using Gift Aid if you wish.
Payroll Giving Grants for employers
The Home Office has a UK-wide grants programme to encourage employers with fewer than 500 employees to set up a Payroll Giving scheme. The scheme, which is administered and promoted by the Institute of Fundraising and Business in the Community, will:
- give employers a cash incentive of up to £500
- match the first £10 donated by each employee, every month, for a period of six months
Your employer can get guidance materials and further information by visiting the Payroll Grants Scheme website, or by calling 0845 602 6786 (open Monday to Friday 9.00 am to 5.00 pm).
