Payroll Giving

The individual (who must be on PAYE) decides on the amount and the charity/charities that should receive it, and informs their payroll department. The employer must have set up a relationship with a Payroll Giving Agency (PGA). PGAs are registered charities, regulated by HMRC, who receive the donations and transfer donations from employers to charities.

Because the donation is taken from your gross pay, every pound you give will only cost you 80p, or only 60p if you are a higher rate tax payer. The cost of setting up the scheme to the employer is minimal, as is the continued administration of the scheme. The PGAs take a small amount out of the donation to cover this cost. This is generally around 4-5 per cent or 25p of the donation.

For charities:

• Providing a reliable income stream
• Payroll donors are likely to continue giving for some time enabling charities to plan for the future
• Potential employer matching

For the donor:

• Tax effective
• No bank details required on sign-up
• Easy to set up and to maintain

For the employer:

• Improves Corporate Social Responsibility / raises Corporate Community Investment profile
• Boosts employee morale and sense of team-building (‘my company was responsible for donating a total of £xx to charity this year’) and, therefore, can aid staff retention
• Aids recruitment (increasingly, graduate applicants ask about the social responsibility and ethical profile of businesses)
• Any money the company gives is tax-deductible
• Can be awarded a Payroll Giving Quality Mark Certificate and become eligible to apply for the National Payroll Giving Excellence Awards

There are a number of agencies known as Professional Fundraising Organisations (PFO) that are able to recruit donors on behalf of many different charities at the same time. They provide personalised materials, including websites and digital tools, promoting payroll giving for employers and charities, and have teams of expert fundraisers who can promote the scheme for employers across the UK.

PFOs do charge the charity a fee for their services, but it may be worthwhile if they are able to tap into income streams that your organisation may not otherwise have access to.

The Payroll Giving Quality Mark and Excellence Awards celebrate the achievements of employers that have adopted and successfully promoted payroll giving schemes in their workplaces, and have enabled their employees to give to the charities that matter most to them.

The Quality Mark provides a benchmark of achievement; it celebrates good practice and recognises employers who operate exceptional schemes. Every employer that offers a payroll giving scheme to their employees is eligible to receive a Quality Mark. Employers that achieve certain benchmarks are eligible to apply for a bronze, silver, gold or platinum Quality Mark.

Employers who achieve a bronze, silver, gold or platinum Quality Mark are eligible to apply for a National Payroll Giving Excellence Award.