Payroll Giving: The Complete Guide for UK Charities & Employers

Payroll giving (also called Give As You Earn) lets employees donate to charity directly from their salary before tax is applied. It's one of the most tax-efficient ways to give — and one of the most underused.

How It Works

1. Employee tells their employer how much they want to give and to which charity
2. Employer deducts the amount from the employee's gross salary (before tax)
3. Money goes through a Payroll Giving Agency (required intermediary)
4. Agency forwards the donation to the chosen charity

The Tax Benefit

Because donations come from gross salary, the donor gets immediate tax relief:

Key point: Unlike Gift Aid, the charity receives exactly what the donor gives. There's no 25% top-up from HMRC — instead, the tax relief goes directly to the donor via their pay packet.

Payroll Giving vs Gift Aid

For Employers: How to Set Up

1. Choose a Payroll Giving Agency — CAF, Charities Trust, Charitable Giving are the main ones
2. Sign up — the agency provides everything you need
3. Promote to employees — communicate the tax benefit clearly
4. Process through payroll — your payroll software will have a payroll giving option

Benefits for employers:

• Qualifies for the Quality Mark from HMRC (gold, silver, bronze based on participation)
• Demonstrates corporate social responsibility
• Boosts employee engagement and morale
• No employer NI on the donated amount

For Charities: How to Benefit

• Promote payroll giving to corporate supporters
• Ask donors if their employer offers it (many don't know)
• Partner with local businesses — offer to present at team meetings
• Highlight the tax benefit — "It costs you £8, we receive £10"