What is Payroll Giving and its Benefits?

Payroll Giving is a scheme that supports employees who wish to give to a charity straight from their gross salary, regularly and on a tax-free basis. This is generally to the charities and good causes of their own choice. Though predominantly popular in the UK, payroll giving is one of the easiest ways of improving employee and employer’s participation in charitable giving and for employees to make the most of their philanthropic endeavours.

How does it work?

Payroll Giving donations are deducted from gross pay, so before tax. For example, for every €1.00 or £1.00 that an employee gives it will only cost them 80c or 80p, and if they’re a higher rate taxpayer, it will only cost them 60c or 60p.

The individual (who must be on PAYE) informs their payroll departments on the amount and the charity/charities that should receive it. The employer must have set up a relationship with a Payroll Giving Agency (PGA). PGAs are registered charities, regulated by government bodies, who receive the donations and transfer donations from the charities.

How does it benefit employees?

  • No bank details required to set up.
  • Easy to set up and to maintain.
  • It is tax efficient and costs less to give more.
  • Donation can be stopped or changed at any
  • Payroll Giving provides more than other donations.
  • It is easy and convenient, coming straight from their payroll.
  • There is no limit on the value of a donation.

How does it benefit employers?

  • Improves corporate social responsibility.
  • Raises corporate community investment profile.
  • Boosts employee morale and sense of team-building, which aids retention and recruitment.
  • The scheme is free of charge, no matter how large or small the company.
  • Any money the company gives is tax-deductible.
  • Enables you to monitor the level of charitable giving that your business has helped achieve, especially if you are tracking using a reliable HR Software System.
  • Offers opportunity to gain recognition by attaining a Quality Mark Award, a Government award given to organisations who implement Payroll Giving. (UK Only)

 Where can I find more information?

For more information on payroll giving visit the GOV.UK website in the UK and the Revenue site in Ireland.