The payroll sector is full of complexity, and that’s putting it mildly. But here’s something that doesn’t have to be complicated – supporting charities through your workplace. Payroll giving is one of those rare things that actually works exactly as it should. Simple. Effective. And it benefits everyone involved.
So, let’s take a look at what payroll giving actually is, why it matters, and how both employers and employees can benefit from it.
What is payroll giving?
Payroll giving is straightforward. Employees donate to charity directly from their gross salary, before tax is deducted. The donation comes out automatically each payday, and because it’s taken before tax, the government effectively tops up your donation through tax relief.
No forms to fill in. No keeping receipts. No claiming tax back at the end of the year. It just happens. That’s the beauty of it.
The benefits for employees
Tax relief without the faff
Here’s where payroll giving really shines. When you donate £10 through payroll giving, it only costs you £8 if you’re a basic rate taxpayer (or £6 if you’re a higher rate taxpayer). The tax relief happens automatically because the donation is taken before HMRC gets their hands on your salary.
Compare that to other giving methods, where you need to remember to claim tax back, keep records, or fill in self-assessment forms. Payroll giving does it all for you.
Regular giving made easy
Charities love regular donations because they can plan ahead. Knowing they’ll receive consistent support each month means they can focus on their work rather than constantly fundraising. For employees, it’s set-and-forget. Once you’ve chosen your charity and amount, that’s it. Done.
And if your circumstances change? You can adjust or stop donations at any time. No guilt. No pressure.
Support multiple charities
Most payroll giving schemes let you split your donation between different charities. Supporting local causes, national organisations, or international relief efforts? You can do all from one simple setup.
The benefits for employers
Boost employee engagement
Offering payroll giving shows you care about more than just the bottom line. It demonstrates that your organisation values social responsibility and supports employees in making a difference. In a world where company culture matters more than ever, this counts.
Employees who feel their employer shares their values tend to be more engaged. And engaged employees are, well, better employees.
Zero cost to implement
Let’s talk brass tacks. Setting up payroll giving costs employers nothing. Your payroll system handles the deductions, and approved payroll giving agencies manage the distribution to charities. No additional fees. No hidden costs.
If you’re already managing payroll (or working with a provider who knows what they’re doing), adding payroll giving is a straightforward process.
Strengthen your corporate social responsibility
Corporate social responsibility isn’t just a buzzword anymore. It’s something candidates ask about in interviews and clients care about when choosing who to work with. A payroll giving scheme is tangible proof that your organisation walks the walk.
Some employers even match employee donations, doubling the impact. If you can afford it, this is a powerful way to demonstrate a genuine commitment to charitable giving.
Administrative simplicity
Unlike organising charity events, running fundraisers, or managing corporate donation programmes, payroll giving runs itself once it’s set up. Your payroll system does the heavy lifting. The approved agency deals with the charities. You get the reputational benefits without the administrative burden.
The benefits for charities
While we’re focusing on the employee and employer perspective, it’s worth mentioning why charities love payroll giving:
- Predictable income they can rely on for planning
- Lower processing costs compared to other donation methods
- Higher retention rates as donors tend to give long-term through payroll
- Full donation amount reaches them without Gift Aid processing delays
How to get started
For employees, speak to your HR or payroll team to find out if your employer offers payroll giving. If they don’t, ask them to consider it. Most payroll systems can handle it, and there are approved agencies ready to help set things up.
For employers, talk to your payroll provider about adding payroll giving to your scheme. If you’re handling payroll internally, contact an approved payroll giving agency. They’ll guide you through the setup process, which is typically faster and easier than you’d expect.
Don’t miss out on the benefits of payroll giving
Payroll giving works. It’s tax-efficient for employees, cost-free for employers, and provides vital regular income for charities. In a sector that’s often bogged down by complexity and outdated practices, payroll giving is refreshingly straightforward.
The best time to set it up was yesterday. The second-best time is today.
Want to know more about how payroll giving could work in your organisation? Talk to your payroll provider. Better still talk to us at Ascend. We can explain in detail how the processes work and run your payroll for you, if we don’t already.
Remember that sometimes, doing good really can be this simple.
