At a Glance
Payroll giving in the UK allows employees to donate directly from their paycheck before tax. This not only makes contributions simple, consistent, and cost-effective but also allows employers to gain tax advantages, lower admin work, and better workplace culture, while charities benefit from greater funding.
Payroll Giving in the UK
As businesses are becoming more conscious of their social impact, they are nudging their employees to contribute to various causes through different volunteering and CSR initiatives.
These programmes offer organisations a great way to make a positive impact while improving workplace culture. However, how do you encourage your employees to donate with minimal effort?
This is where payroll giving or workplace giving programmes comes into place, allowing your employees to donate to a cause without making any extra effort.
Payroll giving benefits not just non-profits and charities, but also organisations and their employees. But, how?
Let’s understand how payroll giving in the UK works, its benefits, and how you, as an employer, can amplify this scheme.
How Does Payroll Giving Work?
Payroll giving is an HMRC-approved scheme, run through Payroll Giving Agencies (PGA) allowing employees to donate to any charity in the UK. Through this scheme your employees can contribute directly from their salaries or pension (gross pay) before tax is deducted. This means a donation of £10.00 per month will cost the donor just £8.00.
Despite its benefits, payroll giving is a highly underutilised but effective donation method that not only makes giving easy but also tax-efficient. Donations are paid directly through the online Pay As You Earn (PAYE) scheme for employers.
Payroll Giving Benefits
There are three main benefits of payroll giving in the UK:
Benefits for Employers
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Easy to set up
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Easy and hassle-free administration process
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Any costs for launching or promoting a scheme can be used to offset against Corporation Tax as tax-deductible expenses
Benefits for Employees
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Encourages a habit of regular donations
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Choice to donate to any UK-registered charity
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Option to split one donation between multiple charities
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Choice to make a one-off tax-free donation at any time
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Employers can also match your donations, boosting the impact
Benefits for Non-Profits
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Magnified donations; for every pound given, the charity receives more.
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Charities can claim more from the government. For higher-rate taxpayers, the cost of a £10 donation can be as little as £6, while the charity still receives the full £10.
9 Tips for Employers to Amplify Payroll Giving
After exploring the many payroll giving benefits, here are nine ideas and tips to help you spread the word and encourage participation from your employees.
1. Highlight the Significance
Help your workforce understand how payroll giving works and the benefits it brings. From tax advantages to giving more for less, consider conducting information sessions to make sure your employees are fully informed and aligned.
2. Use Your Internal Communication Channels
Make the most of your internal communication channels to get the message across about payroll giving. From adding a message to payslip emails to sending SMS reminders, there are many ways to nudge your employees to enrol for your workplace giving programme.
Tip: Try highlighting the scheme on digital notice boards, Slack, or in your internal newsletter. Even a screensaver can help spread the word.
3. Make the Process Easy
Consider whether there are barriers preventing participation. Aim to remove as many as possible by keeping the enrolment process simple and convenient.
Tip: Highlight your scheme clearly during employee onboarding to encourage participation from day one.
4. Lead from the Top
Get senior leaders and management to participate in payroll giving schemes and integrate them into your company culture. Showcasing your leaders' active participation in your workplace giving scheme is bound to inspire all employees to follow in their footsteps.
5. Offer Choice and Control
Payroll giving in the UK can be for any cause or charity. Give your employees the choice and control over which cause to support, and the amount they wish to give. This level of control can encourage your employees to give more.
6. Match Giving
As an employer, you can take an extra step with match giving. Match giving allows you to allocate a part of your organisation’s budget to match the donations of your employees. You can set a capped amount or time period.
Corporate donation matching on payroll giving can not only inspire your employees to give more but also make a lasting impact on the overall workplace giving behaviour.
Tip: Use KindLink’s payroll giving software’s automated donation matching feature to simplify this process.
7. Harness Colleague Advocacy
Ask colleagues who are a part of the giving programme to share their experiences and reasons for giving. This can inspire others to join in, especially if they see people supporting charitable causes that resonate with them.
Tip: Implement colleague-get-colleague promotions and incentives at work.
8. Share Success
Highlight and recognise the generosity of the employees who participate in Payroll Giving and make it a point to express gratitude. Consider featuring donors in company newsletters, social media posts, or internal communications to highlight their contributions and inspire others to join.
9. Set Recognition Goals
Set a payroll giving participation goal and share the progress updates. Successful Payroll Giving schemes are eligible for annual recognition. Set your sights on the Payroll Giving Quality Mark recognition. If you achieve bronze this year, aim for Silver next year.
Tip: Introduce a friendly competition between teams or departments when they cross certain goals.
How KindLink Can Support Your Workplace Giving Programme
Before waiting for the giving momentum to grow, introduce the easy and automated payroll giving software by KindLink, a solution that makes payroll giving effortless for both employers and employees.
The many incredible features include:
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Simple setup process with your payroll and accounting team
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Access to individual employee payroll giving history and management
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A company-branded employee sign-up page
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Automated donation matching
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Compliant HMRC reporting, invoicing and charity payouts
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Flexible fees and plans
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Effortless migration of your payroll giving data from your current provider
Enjoy a seamless payroll giving experience. Book a demo to learn how our payroll giving software works.
