Payroll Giving - a guide for employers

There has never been a better time to join or promote Payroll Giving.

Hundreds of companies throughout the UK support Tommy's regularly through Payroll Giving. We are hoping to encourage many more companies to offer the benefits of Payroll Giving to their employees. If you do not already offer Payroll Giving to your employees, there has never been a better time to start, and if you already run a scheme, there has never been a better time to promote it.

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 donations from their pay. You make the deduction before tax, 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. 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 nominated charities by your employees.

Is it complicated?

Not at all. In fact, most of the administration is carried out by the Payroll Giving agency. In a recent survey, one employer who runs a scheme said "I see it as a time saving arrangement. The charity agency produces all the figures and stats. All we do is to send them the money. It really couldn't be easier." All modern payroll systems can handle Payroll Giving and there are no tax forms to complete. Plus, the records you need to keep are straightforward.

Who pays the administration?

Most of the administration cost is incurred by the Payroll Giving agency. Most agencies make a small charge which they deduct from donations before distributing them to charity. The charge is normally no more than 4% 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 for tax purposes.

How can I find out more?

For more information about setting up or promoting a Payroll Giving scheme visit Payroll Giving in Action.

You can also visit www.inlandrevenue.gov.uk/payrollgiving for further information.

More on Payroll Giving

  • Frequently asked questions

    Payroll Giving FAQ

    Want to know about payroll giving? Here are the answers to the most commonly asked questions.

  • Baby partially covered by a blanket

    Giving through your pay

    Payroll Giving (sometimes known as Give As You Earn) is an easy way to make regular donations direct from your gross pay to Tommy's. It is easy and tax-efficient and actually costs you less whilst giving Tommy's more.

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