Payroll giving

Payroll giving

Payroll Giving or Give As You Earn (GAYE) - Is a tax free way for UK tax payers to give money to UK Registered Charities.

Introduced in 1987, Payroll Giving is a simple, tax efficient scheme which allows employees to give money to the UK registered charity of their choice by having a deduction taken straight from their gross pay. There is no tax for the charity to claim back as no tax was deducted.

Some companies match or part match their employee donations via Give as You Earn [ [http://www.workplacegiving-uk.com/about-us/case-studies/grainger-trust.php Case study of an employer with £ for £ matching] ] .

Administration

More than 10,000 employers in the UK currently operate the scheme, and circa 2% of UK employees participate. Participating employers deduct agreed sums of money from their employees pay before calculating tax, and forward the money to a payroll giving agency; the agency then distributes the money to registered UK charities in accordance with the employees wishes (minus an administration fee).

Advantages

For Donors

The UK has a progressive Income Tax system with a top rate in 2008 of 40%, and for higher rate tax payers this is a more tax effective way to donate to charity than Gift Aid, as Gift Aid assumes all donations were from Basic rate Taxpayers.

For Employers

As part of a broader corporate social responsibility policy, Payroll Giving offers employees the opportunity to channel their support for their social concerns whilst at the same time demonstrating the company’s strong credentials as a socially responsible business. Employers with high participation rates can win Bronze, Silver and even Gold awards from the Government [ [http://www.engagemutual.com/MediaCentre/PressReleases/030206.asp Engage wins Gold] ]

For Charities

Charities benefit from their donations being tax free.

External links

* [http://www.workplacegiving-uk.com/ Workplace Giving UK]
* [http://www.payrollgiving.co.uk/ Payroll Giving in Action]

References


Wikimedia Foundation. 2010.

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