Payroll giving policy

Use our policy to introduce a scheme to enable you to help charity by facilitating employees to make regular tax-efficient charitable donations directly from their salary.

Scheme operation

A payroll giving scheme is fairly simply to operate. You need to appoint an approved payroll giving agency; employees need to set out in writing which charities they want to donate to on a regular basis in line with their pay periods (weekly, monthly, etc.); how much they wish to donate and authorise the deductions to be made from their wages; and then you make the deductions and pay them over to the agency which, in turn, distributes the monies to the nominated charities. The agency will charge an administration fee for their services (usually either a percentage of each donation or a fixed amount for each donation) and then it’s up to you whether you agree to bear those costs or whether the employee will pay for them out of their donation. We’ve covered all of these matters in our Payroll Giving Policy. We’ve also provided for you to select a particular charity which would enable employees to pool their donations to your nominated charity fund, should they wish to do so, rather than donating to a charity of their own choice. This can help demonstrate the company’s commitment to a particular charity or cause.

Tax aware

The benefit for employees in giving to charity direct from their salary is that they get immediate tax relief at their highest rate of tax because the charitable donations are made before the deduction of income tax. So it’s a tax-efficient way of donating. 

Paperwork

When operating a payroll giving scheme, it’s advisable for you to maintain:

• a copy of your contract with the payroll giving agency
• the charity nomination and consent forms that employees complete - in particular, these are your evidence that the employee has authorised the deductions to be made from their pay
• a record of the deductions you have made from each employee’s pay - and make sure this is itemised on their weekly or monthly payslip
• a record of the money that you have forwarded on to the payroll giving agency.

Scheme amendment

As with all schemes of this nature, it’s not contractual and therefore we’ve reserved the right for you to amend, vary or withdraw it, or to change any of the rules.