Payroll Giving or Give As You Earn (GAYE) is a tax efficient way of giving directly to charity from your gross salary to Family Holiday Charity.
A gift would mean the world to a family who have never been on holiday before, and who are facing tough times like illness, bereavement, isolation or other life challenges. Donating through payroll giving means your money goes further as the charity benefits directly from the tax relief.
How Give As You Earn (GAYE) works
If you pay tax at the basic rate, every £1 that you earn, 20p is paid in tax – 20%. As a basic rate taxpayer, if you donated £10.00 per month, just £8.00 would be deducted from your net pay - the balance is paid directly to Family Holiday Charity instead of the Inland Revenue.
If you pay tax at the higher rate of 40%, a £10 donation would mean only £6.00 would be deducted from your net pay. If you pay tax at 50%, just £5.00 would be taken from your salary if you chose to donate £10.00.
If you are a higher rate or super rate taxpayer, its more efficient to donate through a regular payroll giving gift than gift aid – as charities can’t claim gift aid above basic rate through the Gift Aid scheme.
See how much further your donation could go through payroll giving:
|Amount you would like to donate each month||How much you will pay from your salary at different tax rates|
|Basic Rate Tax (20%)||Higher Rate (40%)||Super Rate (50%)|
How to set up Give As You Earn with your employer
If you would like to give in this way, you will need to ask if your employer already runs a payroll giving scheme.
The best place to start is usually by asking the HR team – though sometimes payroll giving may be managed by the finance team.
If your employer is already running a scheme, just ask them how you can donate directly to Family Holiday Charity through payroll giving, letting them know the amount you’d like to make as a monthly donation.
If your employer doesn’t run a payroll giving scheme, why not ask if they would start? The process is fairly straightforward:
- Select a registered payroll giving agency – Association of Payroll Giving Agencies is a good place to find out more and to find a reputable agency.
- Set up a scheme
- Make deductions when payroll is run – donations are taken before tax but after national insurance contributions
- Send the donations to your chosen agency – who distribute them to the chosen charities