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Payroll giving

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Using payroll giving to raise money for your organisation.

Payroll giving is a tax-effective way for people in work and on PAYE to give regularly.

Donations to charity are automatically deducted from pay before tax is paid, so unlike Gift Aid, the tax relief goes directly to the donor. Only 3% of the UK workforce donates this way.

To set up payroll giving, employers need to sign up to the scheme and find a payroll giving agency to distribute donations.

Why use payroll giving?

If you have good links with a company that employs people, then it’s worth exploring payroll giving. It gives you the opportunity to connect with a company and its employees, and to involve them in celebrating your work and impact.

Payroll giving is cost effective for the donating employee and as a fundraising method for your charity. Once signed up, donors stay loyal – often for 10 years or more.

How payroll giving works

Payroll giving is a flexible scheme that lets employees donate to any UK charity straight from their gross salary (ie before tax is deducted), and to receive tax relief of up to £5 for every £10 donated (depending on their tax rate). 

It costs a basic rate taxpayer £8 to make a £10 gift through payroll giving, and a higher rate taxpayer just £6 for the same £10 gift. 

Payroll giving provides UK charities with a regular, reliable income stream, allowing them to plan ahead and budget for the future. 

How to make payroll giving work for you

You have to work through a payroll giving agency, which will handle and advise on the procedures involved. The largest is the Charities Aid Foundation (CAF). You can see a full list of government approved payroll giving agencies on gov.uk.

You’ll need to promote the scheme to companies and employees. Do your research – find out what kind of people work at the company and why they might want to support your cause. Find out whether there is an internal communications channel where you could promote the scheme, and build up a relationship with their internal comms managers or HR staff.

Think about what opportunities you could offer the company to get involved with your charity in other ways, for example through volunteering or events.

Companies often match their employees’ donations, and there is a quality mark awards scheme for certain participation levels, which is funded by government and issued by the Institute of Fundraising. The National Payroll Giving Excellence Awards is an annual event held at HM Treasury to showcase excellent examples of payroll giving.

Payroll Giving also offers charities a unique way to combine fundraising and building donor relationships with corporate community investment.

Get more help

The Institute of Fundraising offers more detail on tax-effective giving for donors, charities and employers.

Page last edited Feb 24, 2017

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