What is Payroll Giving?
Payroll Giving enables your employees to make regular donations to the charity of their choice through their salary. It is an easy tax-free way for them to support their chosen charities as their donations are deducted before tax. All employees on your payroll who pay Pay As You Earn tax are eligible to make donations through Payroll Giving.
How to set up a Payroll Giving scheme:
1. Contact a payroll giving agency, a list of Payroll Giving agencies can be found at http://www.hmrc.gov.uk/payrollgiving/employers/org.htm
2. The Payroll Giving Agency will then set up a contract with you and will provide you with forms, which your employees can complete to authorise you to deduct their donations from their salaries.
3. You pay all the money you deduct to H M Revenue & Customs approved Payroll Giving Agency. The deductions are made before tax, but after NI contributions. This enables the employee to get tax relief on their donations.
4. The Payroll Giving Agency will then handle all the administration required for Payroll Giving and distribute the donations to the employee’s chosen charity.
The benefits of setting up a Payroll Giving scheme:
- Enhances your corporate responsibility programme, which will help support your image as an ethical business
- Shows support for the local community
- Improves staff motivation as the scheme promotes you as a responsible employer, who is concerned about their welfare, this will also help promote teamwork, staff retention and will develop staff relations
