Payroll Giving is a scheme which allows employees to donate to charity from their pay tax-free. Employees can opt to donate to any UK charity or good cause from their salary. Contributions are deducted from gross pay before tax is calculated by the employer’s payroll department. Donating to charities tax-free directly through your salary is the most tax-efficient way to give.
Payroll Giving donations are taken from pay after National Insurance but before tax. A donation of £5 a month would actually cost an employee £4 from their take-home pay (if they pay 20% tax) or £3 (if they pay 40% tax).
Payroll Giving is important. Encouraging regular donations is vital for the future of charities. Charities big and small depend on the regular income that Payroll Giving provides as it allows them to plan their work including research, building projects, and giving practical help to those vulnerable and in need.
There are lots of benefits to offering a Payroll Giving scheme for your employees and every employer in the UK can start a scheme regardless of your size. Research shows that donating to charity or simply being kind helps mental health and general wellbeing. More than £2billion has been donated through Payroll Giving by over 1 million employees.
"Our Partners value making a difference, not only at work, but in their everyday lives. Payroll Giving makes it convenient and easy to help our Partners make ongoing donations to the causes closest to them. Through Payroll Giving, our Partners have created impact and relevance when and where it matters, meaning more donors to more charities and a better understanding of Payroll Giving in general."
Stacey MacDougall – John Lewis & Partners, Health and Wellbeing Development Manager
“We love Payroll Giving at Mitchells & Butlers, our team have wholeheartedly embraced giving from their pay as a quick and easy way to support their favourite causes. We’re delighted to offer the scheme and would encourage any other employers to provide it for their teams too, it’s a win win!”
Lauren Collier, Reward & Policy Manager, Mitchells & Butlers
"Payroll Giving is part and parcel of Cancer Research UK’s payroll offering. It takes very little time to administer but offers our staff a great way to support their favourite causes. We have only recently re-promoted our Payroll Giving scheme because it is important to make all the staff members aware of the scheme and enable them an easy way to start their regular gift."
Kresh Veerasamy, Payroll & Systems Specialist, CRUK
*There are no set-up costs for employers. Payroll Giving Agencies can charge a processing fee of up to 5% of the donation amount. However, some agencies don’t charge and some charge a transaction fee per employee. You may choose to cover this fee for your employees otherwise the Agency will deduct it from donations. You can find a list of all approved agencies on the Gov.UK website.
The annual Payroll Giving Month takes place each February. This is the only moment for Payroll Giving in the calendar and the aim is to raise awareness of the scheme amongst employees, employers, and charities. It is also a great time to encourage more employees to support a cause they care about via Payroll Giving.
This is a great time for employers to start a Payroll Giving scheme, or if you already have a scheme in place to run a promotion to encourage your staff to sign up and give to a cause they care about.
As well as internal communications, Payroll Giving Month provides a great opportunity for you to tell your clients and customers that you and your employees are helping great causes through donating via their pay. Everyone loves hearing good stories on social media. Share with your stakeholders how well your Payroll Giving scheme is doing. Share how much your employees donate to UK charities, celebrate or announce your Payroll Giving Quality Mark or simply thank you employees for the difference they are making. Be sure to use the hashtags #payrollgiving #payrollgivingmonth and #lovepayrollgiving. Perhaps you could even start a friendly competition with a local business or competitor to generate some noise about your businesses and your schemes!
We encourage you get involved in Payroll Giving Month to:
Think about what internal communications work best within your workplace and aim to integrate into existing channels and activities.
Do you have an intranet or similar site you could have a post on the homepage of for Payroll Giving Month?
If you have a charity partner or work with a Professional Fundraising Organisation (PFO) could they provide materials, video links, or come to your office for a day and talk to staff to help promote the scheme?
Do have you Charity Champions in your organisation? How could they be involved?
Could you run team/department or regional competitions to make the month a fun morale boosting time for all?
To include staff – include homeworkers – could virtual elements to the months activities be included?
Are you matching donations? Donation matching is also a huge motivator for staff and an extremely powerful way for employers to demonstrate their commitment to the causes their staff care about. There are many approaches beyond the typical matching of dollar-for-dollar – see the promotional idea section for some tips.
Could you incentivise employees to sign up? Could you offer a prize of a free lunch, coffee for a month, a bottle of bubble, a days’ annual leave, or similar idea to one employee – or team/department - picked at random who signs up to give during Payroll Giving Month?
You can find out more about Payroll Giving and Payroll Giving Month here.
This webinar, hosted by Barnardo's and Together for Animals, provides an introduction to the scheme, its benefits and the campaign.