Payroll giving – employer FAQs

Payroll giving

Payroll giving is a tax-efficient way of donating to charity. The donation is taken from an employee’s pay so it’s very easy and convenient. And as it’s taken before tax, the charity receives even more money.

For example, when someone who pays tax at a 20% rate makes a donation of £10 per month, the charity receives £12.50 per month.

Monthly donationShelter receives (20% tax payer)Shelter receives (40% tax payer)Shelter receives (45% tax payer)
£5£6.25£8.33£9.09
£10£12.50£16.67£18.18
£15£18.25£24.99£27.27

* Please note that we have calculated that the 40% higher rate tax band starts after earning £41,450 GROSS per year (including personal allowance of £9,440) and 45% super tax is applicable to those earning over £150,000 GROSS per year (this includes any and all personal allowances that might or might not be applicable).

Setting up a payroll giving scheme

To set up a payroll giving scheme, your company must register with a payroll giving agency. They then distribute your employees’ donations to the nominated charities. There are a number of HMRC-approved agencies to choose from, including:

For a full list of agencies, visit the HRMC website.

Use our online form and our free promotional materials to promote your payroll giving scheme to staff.

Deduct employees’ donations from their salary using your normal payroll software, then send the employees’ names and donation amounts to your agency every pay run (normally monthly).

Shelter Scotland and any other nominated charities receive your employees’ donations from your agency.

How to promote payroll giving

Here are 10 easy ways to promote your payroll-giving scheme:

  • Pick a day or a week to dedicate to promoting payroll giving

  • Use our free promotional materials

  • Share our link with staff so they can sign up to your payroll giving scheme

  • Place posters in eye-catching places

  • Jazz up your office or staffroom with balloons or streamers to highlight the scheme

  • Select payroll giving champions to tell colleagues about the scheme

  • Invite a professional fundraising organisation (PFO) to tell staff about payroll giving (for example, Workplace Giving, Charity Link, Hand on Helping, Sharing the Caring, Payroll Giving in Action).

  • Share the information on your blog, internal intranet, emails and staff newsletters

  • Celebrate with a cake – sweet treats are a great way to celebrate payroll giving

  • Invite Shelter Scotland to speak to staff about the great work we do and how to support us through payroll giving – contact us at payrollgiving@shelter.org.uk

How payroll giving benefits an organisation

Payroll giving is easy to set up and run and helps to build morale and enhances your company’s public image.

It is low cost to set up and maintain, can feature as part of your company’s Corporate Responsibility programme (CSR) and shows support for causes that matter to your employees.

Any costs incurred in setting up and promoting a scheme may be offset against Corporation Tax as tax-deductible expenses.

‘Employers reported that payroll giving improves the company image (61%)’*

*Source: Institute of Fundraising, The Giving Campaign report into the business benefits of Payroll Giving, through the Ashridge Centre for Business in Society, 2002.

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