Payroll Giving, also known as Give As You Earn (GAYE), is a tax-efficient way for employees to donate to the registered charities of the employer by having deductions made directly from their pay before tax.
Employers must first set up and run the giving scheme. If you haven’t set up a scheme yet, you can contact the Payroll Giving agency to do so.
How to set up GAYE via payroll?
From the main menu, head to Pay items > Addtional deductions and select Payroll Giving from the list of deduction types.
Then click on Add a new payroll giving scheme where the scheme, agency, frequency and amount can be set up. The same scheme can be applied to one or more employees by selecting them from the list.
For every new scheme, this section will need to be filled in, and the relevant employees included. Once the scheme is set up and the employee included, click save, and the deduction will show under the relevant employee records in line with the frequency set up.
If the employees are making monthly contributions, the scheme will only need to be set up once, but the deductions will be in place every month. If there are any changes to the donations, you can return to this section where you will see a full list of the schemes set up. You can then click on the three dots under Actions to edit or delete the scheme.
Frequently asked questions
Is there any benefit to the employee compared to making donations outside the payroll?
The employee benefits by not having to pay tax on the amount donated. The donation will be taken from your employees’ pay before tax but after National Insurance. This method allows you to give to charities of your choice, making your donations more impactful and cost-effective. This means your donation is tax-free, and you'll receive tax relief on your donations.
Who is making the payment to the selected charity?
The employer will need to arrange the payments after the payroll is run.
Who can participate?
Anyone who pays UK tax through PAYE can participate in Payroll Giving.
What are the other benefits to consider?
Payroll Giving offers a convenient and easy way to donate regularly, ensuring that your money goes directly to the charity without any additional effort on the employee's part. It also allows them to give more for less, as the donation is made from the gross pay. The employer can also contribute or match the employee contribution.