The beauty of Payroll Giving is that every one benefits - your company, your employees, and, most important of all, a whole range of deserving charities.
For your company it is a simple way to demonstrate your commitment to staff morale and good causes. For donors it's an easy way of giving more at no extra cost to them. For charities it provides a regular flow of income.
Because donations come straight from their gross pay, donors effectively increase the value of their contributions.
What is Payroll Giving?
It may surprise you to know that a recent National Opinion Poll survey shows that, each month, around two thirds of us give to charity. Payroll Giving is a simple, tax effective way for your employees to make donations. Over 9,000 businesses already offer the benefits of Payroll Giving to around 5 million employees, and the numbers are growing.
Why should I offer Payroll Giving to my employees?
Running a Payroll Giving scheme is good for your business. Not only does it show that you're committed to working in partnership with the community - something that is increasingly important to customers and staff - it also shows that you care about your staff. Offering them the benefits of Payroll Giving can also 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 can deduct any administrative costs from company profits for tax purposes.
How does Payroll Giving work?
It's 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 straightaway at their top rate of tax.
For example, it will only cost your employees £7.80 to donate £10 to the charity of their choice (assuming basic rate tax).
You 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.
