Payroll Giving provides charities with regular, reliable donations, allowing them to plan ahead and budget for the future.
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How your money helps people living with cancer.
£5 a month could pay for a liquidiser for someone who can't eat solid food because of the treatment they are going through.
£10 a month could pay for new clothing for someone experiencing weight loss or pay for a Macmillan nurse for one day.
£30 a month could pay for a much-needed holiday for someone with cancer and their carer.
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“I'd recommend Payroll Giving to anyone. It's simple and safe, it provides direct support in these difficult times for charities that I care about, and it's a great way of giving something back. Every employer should give its employees the chance to get involved.”
Angus Saer Director - EMEA Equities
ING Commercial Banking
"Payroll Giving is the simplest and most effective way to give to charity, both for employers and employees, and has been promoted by the government as a great way to boost charitable giving overall. "BT alone raises £3.5m for charities through Payroll Giving every year, but many more British businesses need to get behind the scheme if it is ever to truly deliver on its massive potential.
Sir Michael Rake
Chairman of BT Group
"At Whitbread we are very proud of our Payroll Giving scheme which is an important part of our broader 'Good Together' CR programme. "Over 20 per cent of our team members have chosen to donate regularly in this way as it's easy and tax efficient. I would encourage every employer to be a force for good by helping their people support the charities of their choice in this way."
Payroll Giving is growing rapidly
Payroll Giving has increased from £37 million in 1999/2000, to over £126 million in 2014/2015
There is room for further growth
Only 4% of UK employees participate in Payroll Giving schemes. In the US, the employee participation rate is nearly 35%.
Payroll Giving can make a tremendous difference to UK charities
If we could increase participation to 10% of UK employees, then charities would receive an additional £300 million.
And it's good for business
Research shows that companies which offer Payroll Giving believe it improves the company image, enhances community involvement programmes, and supports employee volunteering.
96% of companies feel that Payroll Giving is something a good employer should offer....
And nearly all said they would like to increase participation levels in their organisations.
Frequently asked questions
Click below to read the answer the most frequently asked questions regarding payroll giving.
Questions such as What is Payroll Giving and why should I offer it to my employees? etc
Q: What is Payroll Giving?
Payroll Giving is a simple, tax-effective way for your employees to give to charity from their pay. Over 9,000 businesses already offer the benefits of Payroll Giving to around 5 million employees. And the numbers are growing all the time. This guide answers your questions about Payroll Giving and tells you how to get your own scheme up and running.
Q: Why should I offer Payroll Giving to my employees?
Running a Payroll Giving scheme can be good for your business. It shows that you are committed to working in partnership with the community, something that is increasingly important to customers and staff. It shows that you care about your staff - offering them the benefits of Payroll Giving can help to build better employee relations and attract the right people to come and work for you. It is easy and inexpensive to run, and you get a deduction against your profits for your costs.
Q: How does Payroll Giving work?
Simple. Your employee asks you to deduct regular charitable donations from their pay. You make the deduction from before-tax pay – in other words, after calculation of National Insurance Contributions but before deduction of Pay As You Earn tax. This way your employee gets tax relief straight away at their top rate of tax. For example, giving £10 a month costs a basic rate taxpayer only £8.00 because they save £2.00 tax. For a higher rate taxpayer the cost is only £6 because they save £4 tax. You as an employer pay over all the money you deduct to an Inland Revenue-approved Payroll Giving agency, and they do the rest – distributing the money to the charities nominated by your employees.
Q: Isn’t it complicated?
No. Most of the administration is carried out by Payroll Giving in Action and your chosen agency. All modern payroll systems can handle Payroll Giving. There are no tax forms to complete. And the records you need to keep are straightforward.
Q: What records will I need to keep?
You will need to keep a copy of your contract with the Payroll Giving agency, the forms completed by your employees authorizing you to make deductions from their pay, a record of the deductions made from each employee’s pay, and receipts from the Payroll Giving agency.
Q: Who pays for the administration?
Most of the administration cost is incurred by the Payroll Giving agency. They normally make a small charge which they deduct from donations before distributing them to charity. The charge is normally no more than 4 per cent of the donation, or 25p per payroll deduction, whichever is the greater. Your administration costs should be very small and are likely to be absorbed in your existing payroll costs. In any event, any costs of running a scheme will be allowed as a deduction against your profits.
Q: Can I pay the agency’s charge?
Yes. Many employers like to do this so that the full amount of their employees donation go to charity. If you pay the agency’s charge this will be allowed as a deduction against your profits.
Q: Can anyone who works in my company join the scheme?
Any employee or pensioner from whose pay or pension you deduct Pay As You Earn tax may join the scheme. There are no limits as to how little or how much an employee can give. Most employees give £5 per month.
Q: Can I match the donations made by my employees?
Yes. This is an excellent way of demonstrating your commitment to the community and building good relations with your employees. Any matched donations you make will be allowed as a deduction against your profits.
Q: Can I use Payroll Giving to support my company’s chosen charity of the year?
Yes, although your employees will be free to give to any charity they choose.
Q: Do I need to know the names of all the charities to which my employees wish to donate?
No. Besides, your employees may wish to keep their choice of charity confidential. Payroll Giving in Action can provide charity nomination forms which your employees can complete and return directly to us. Some agencies provide a charity card or charity cheque book so that your employees can give directly to the charities of their choice whenever they want.
Q: Will my employees get unwanted mail from charities asking for money?
Most charities like to write to their donors to thank them and give them information about how their donations are being used. The information provided by your employees is protected under the Data Protection Act and can be used only for the purpose for which it was given.
Q: I want to run a Payroll Giving scheme. How do I get started?
The first thing to do is contact Payroll Giving in Action on 01271 344360
Q: How can I get the most out of my Payroll Giving scheme?
To get the most out of running a Payroll Giving scheme it is important that you promote it effectively to your staff. Payroll Giving in Action can advise the best solution for your company and your locations.
Launched in January 2006, the Payroll Giving Quality Mark recognises and rewards organisations for making Payroll Giving available to their staff.
Comprising a certificate and logo, as well as Bronze, Silver, Gold and Platinum Awards, the Quality Mark aims to provide UK charities with sustainable income streams by increasing participation in Payroll Giving.
Once you set up a Payroll Giving scheme, you will automatically receive a certificate as well as a logo for use on your letterheads, websites and other company literature. These acknowledge that you have implemented Payroll Giving and demonstrate (both within your organisation and publicly) that you are committed to the good causes your employees care about.
The Quality Mark Awards reward employers for fostering a culture of committed giving in the workplace by actively promoting Payroll Giving.
Bronze, Silver, Gold or Platinum?
Awards are available for organisations that achieve minimum staff participation rates and employer support in Payroll Giving as outlined below:
Awarded to employers that achieve 1% employee participation rate in Payroll Giving.
Awarded to employers that achieve 5% employee participation in Payroll Giving.
Awarded to employers that achieve 10% employee participation in Payroll Giving + employer support*. * Employer support means that the employer must either pay the administration charge, match donations or demonstrate that they have carried out an active promotion of Payroll Giving during the previous year .
Platinum AwardThe Platinum Quality Mark Award recognises employers that continually strive to increase donations to UK charities through Payroll Giving. Employers that are recognised through the Platinum Award will have committed themselves to promoting Payroll Giving in the workplace and increasing charitable donations.
Platinum Award Criteria
Employers must have achieved and held the Gold Quality Mark Award for at least one year (i.e. the 2011 Gold Award) prior to applying for a Platinum Quality Mark Award in 2012 and completed at least one task from each of the three sections below in the past 12 months:
Public Register of Employers Offering Payroll Giving
- Employers must have signed-up to the public register of employers offering Payroll Giving to their staff.
Register your company details here
Increased Payroll Giving (a minimum of one must have been achieved)
- Either achieved an overall employee sign-up to Payroll Giving of 20%, or increased employee take-up from the previous year by a minimum of 10%
- Increased existing donations (through demonstrable promotion) by a minimum of 10%
- Matched employee contributions by a minimum of 10%
Promoted Payroll Giving (a minimum of one must have been achieved)
- Actively encouraged pensioners (past employees) to continue to use Payroll Giving
- Used volunteers or past employees to promote Payroll Giving to current staff
- Provided evidence of an active promotion that encouraged clients and customers to use Payroll Giving
- Introduced (and signed-up) a minimum of five new employers to Payroll Giving (evidenced through relevant PGAs)
- Publically demonstrated commitment to Payroll Giving through use of the Payroll Giving and Quality Mark logos on letterhead, websites and other promotional materials
- Demonstrated effective use of the induction and/or review process to introduce staff to Payroll Giving
------------------------------------------------------------The Awards symbolise excellence, recognising those employers that are making a difference together through Payroll Giving, benefiting good causes and employees alike. Winning an award is a great news story for your organisation, so why not Go for Gold?
Setting up a Payroll Giving Scheme
If you are an employer and want to help your employees support charities long term, you can set up a payroll giving scheme.
Payroll Giving is one of the easiest and most flexible methods of giving to charity. It is easy to set up and is a low cost initiative to operate.
Payroll Giving enables employees to make valuable charitable donations straight from their salary and provides a continued and vital stream of income to charities and local community groups. An agreed amount is deducted from an employee's gross salary and sent to an approved payroll giving agency who pay it directly to the nominated charity.
All modern payroll systems can handle payroll giving. The monthly donation is taken for pre-tax pay. i.e after calculation of National Insurance contributions but before PAYE is deducted. The payroll department will process the payroll deductions and send all donations to your Payroll Giving Agency. If you offer matching of the employees donations, you will need to transfer these funds to your Agency.
The Agency will deduct a small administration fee (usually 25p or 4% of the donation) from each donation to cover its costs. Many employers arrange to pay this fee on behalf of employees so that 100% of employees' donations goes to the charity.
Employees will see the pre-tax deduction from their payslips. If an employee is a basic rate taxpayer, a monthly donation of £10 will show up on the employees payslip as a pre-tax deduction of £10, but this is equivalent in cost to the employee of £8.00 after tax. Donations are deducted until the employees inform you to stop or change their donations. The Agency will report back to you so that you can keep track of total employee donations and any matching you provide. There are no tax forms for you to complete for either the employee or the company and record keeping is straightforward.
Records that a company needs to keep are:
1. A copy of the contract with the payroll giving agency.
2. A copy of your employee's donor form authorising deductions from their pay.
3. A record of deductions made from each employees pay receipts from payroll giving agency.
Please contact us for help and advice on setting up a new payroll giving contract.
Tel: 01271 344360
HM Revenue & Customs approved agencies
Payroll Giving in Action work alongside three HM Revenue & Customs approved agencies. There are three main agencies in the UK.
Your company simply decides which agency to work with and sign an HM Revenue & Customs approved contract.
The agency informs the HM Revenue & Customs that your company is operating a payroll-giving scheme.
Payroll Giving in Action can supply your company with a contract from Charities Trust, Charitable Giving, and Charities Aid Foundation.
Simply contact PGA on 01271 344360.