Setting-up a Payroll Giving scheme is simple and there are many benefits for employers:
- an excellent way to support employees wishing to make tax effective donations
- enhances a company’s social responsibility profile and provides good PR opportunities
- boosts staff morale and aids both staff retention and recruitment
- display Government funded Payroll Giving Quality Mark and work toward Gold Award
- influences business-to-business relationships
- provides opportunities to demonstrate investment in the local community
If you operate PAYE, you can set-up a Payroll Giving scheme
There are virtually no costs other than:
- The time taken to set-up the scheme and promote it to your employees, and
- A small administration charge. The standard administration charge is four per cent of the total deductions. This can either be deducted from each donation each pay day, or paid by the company on behalf of the employees by adding it to the deductions sent in, in which case, the administration charge is a tax-allowable expense against profits.
Uptake of Payroll Giving is always greater amongst staff whose employer enhances their Payroll Giving scheme by paying the administration charge and/or matching the gift. It shows that you are a good employer, you are socially responsible and that you care about the charities your staff support.
You can enhance your Payroll Giving scheme in a number of ways:
- Matched giving: pound for pound matching, this can be operated for a time specific period, can be on a first come first served basis until the budget is exhausted or it can be capped i.e. up to £10 per month limit.
- One-off gift: on joining the Payroll Giving scheme, the employer can make a one off donation to the charity chosen by the employee. This could be any amount depending on budget.
- Percentage matching: this is like matched giving but instead of pound for pound matching it is an additional 10–50 per cent of the donation made by the employee.
In 2007 Sense was one of the charities who received funds and a matching gift via BT’s scheme.
“Payroll giving offers a simple and effective way for BT people to support charities of their choice tax efficiently. As a result of monthly contributions from employees, and donations receiving matching from BT we know this really makes a difference to thousands of voluntary organisations each year. We recognise this is a vital source of sustainable income for voluntary organisations which enables them to deliver critical services to their communities.”
Beth Courtier - head of charity programme, BT.
To find out more about setting up a Payroll Giving Scheme please contact Ben Parry ben.parry@sense.org.uk or (020) 7014 9347/ 0845 127 0060.
