What is payroll giving?
If you pay tax through Pay As You Earn (PAYE), payroll giving is a way of making regular gifts to UK charities. It allows you to authorise your employer to make the donation from your pay. The scheme may be called payroll giving, Give As You Earn or workplace giving.
Your employer takes off the gift payments before working out and deducting your tax, so you get relief on your donation immediately at your highest rate of tax.
For example, if you pay tax at the UK basic rate of 20%, and authorise a monthly donation of £10, you save £2 tax (20% of £10). The actual cost of the donation to you is £8. If you pay tax at the higher rate of 40% and authorise a monthly donation of £10, you save £4 (40% of £10). The actual cost of the donation to you is £6.
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.
You can use payroll giving as long as both of the following apply:
- you are an employee and your employer deducts tax through the PAYE system;
- your employer operates a payroll giving scheme.
You do not have to tell your employer which charities you support. The payroll giving agency running the scheme provides you with a charity nomination form, which you can complete and return directly to the agency to tell them where they should send your donations.
Some payroll giving agencies can provide you with a charity card or cheque book so that you can make gifts directly to any charity whenever you want to.
Once a gift has been deducted from your pay no refund is possible. Some agencies may charge a small fee, which is deducted from your donation, to cover administrative costs.
There is more information on payroll giving – giving to charity through your pay – on GOV.UK.