Understanding and promoting the Payroll Giving scheme

Charities can accept donations made directly from salaries or pensions using the Payroll Giving scheme. It's a simple, tax effective way for donors to give to your charity directly from their earnings or their company or personal pension.

On this page:

What is Payroll Giving?
How Payroll Giving works
Benefits of Payroll Giving
Professional fundraising organisations
Contacting the HMRC Charities Helpline
More useful links

What is Payroll Giving?

Payroll Giving lets donors make regular or one-off donations to charities of their choice directly from their earnings or company or personal pension.

Donations are made out of income before Income Tax is taken off. This means that donors are given tax relief on their donation immediately - and at their highest rate of tax.

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How Payroll Giving works

The scheme is managed by HMRC - approved Payroll Giving Agencies (PGAs) - which are themselves charities - who run it on behalf of employers and pension providers.

An employee asks their payroll department to deduct regular charitable donations from their gross pay (before calculating their PAYE tax payable, but after National Insurance contributions). The company then passes that money to a PGA, which sends the donations to the appropriate charities.

PGAs usually deduct a small administration fee for each donation. Sometimes the employer pays this on the donor's behalf.

Find contact details of Payroll Giving Agencies approved by HMRC

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Benefits of Payroll Giving

Payroll Giving is an easy, tax-effective way to give to charity - so it costs employees less to give more. The system is easy to opt in and out of, giving donors full control over their giving.

Benefits for charities

The donations are deducted from an individual's pay or pension before tax and so it saves you time and paperwork as you don't have to reclaim any tax.
The donation goes straight from the donor's pay or pension via the PGA into your bank account.
It's a regular source of income - making it easier for you to budget and plan.
It's a way to communicate with and get to know your donors (although donors can choose to remain anonymous) - you can build a relationship with them and employers or pension providers.

Benefits for donors

Their taxable income is reduced and they get all of the tax relief - so a donation of £10 costs a basic rate taxpayer £8 and costs 40% or 50% higher rate taxpayers £6 or £5 respectively.
It can be anonymous - the employee doesn't have to agree to the charity knowing their name (and employers don't know which charity an employee chooses to support).
Donors don't have to remember to give - regular gifts continue to be sent to their chosen charity for as long as they choose.
It's flexible - donors can give to several different charities.

Find out more about how donors can give to charity through their payslip or pension