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A helping hand: providing a boost for charities and apprentices
Sarah Smith MCIPPdip, CIPP policy and research officer, highlights the importance of payroll giving month and National Apprenticeship Week
I n February, there are two important celebrations taking place – National Apprenticeship Week, which runs from 10 to 16 February, and payroll giving month. Payroll professionals are ideally placed to promote both and should embrace the opportunity to do so. What is payroll giving month? Payroll giving month is celebrated in February every year. It’s a whole month where payroll giving agencies, payroll funding organisations and companies have an opportunity to make a meaningful difference by promoting and raising awareness of payroll giving. Payroll giving, also known as give as you earn (GAYE), or workplace giving, is a simple yet effective scheme that allows employees to donate whatever they wish to one or more UK-registered charities of
their choice directly from their gross salary. This method offers multiple advantages; it’s tax-efficient, convenient and creates a culture of collective social responsibility within organisations. How the scheme works The scheme requires minimal effort but gives the advantage of full tax relief as it enables the charity to benefit from the higher tax rates paid by certain taxpayers. Employees authorise a regular donation (voluntary deduction) from their salary after National Insurance contributions (NICs) but before tax is calculated. This means the tax that would have gone to the government is instead redirected to support charitable causes. For example, a £10 donation will only cost an individual £8 if they’re a basic rate taxpayer or £6 if they’re a higher rate taxpayer (based on tax rates in England,
Wales and Northern Ireland), making charitable giving more accessible and financially efficient. Payroll giving facts Although payroll giving has been around since 1987, there are still many organisations that are not engaging with an existing scheme or don’t have a scheme at all. At a time when charities are struggling due to several extremely challenging years, payroll giving is essential to helping them to continue their vital work. Around £150 million is lost each year on tax relief that’s unclaimable due to the gift aid box not being ticked, even when the donators qualify. However, more than £2 billion has been raised through payroll giving since its inception. In 2023 alone, £130 million was raised for thousands of charities and
| Professional in Payroll, Pensions and Reward | February 2025 | Issue 107 56
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