How does payroll giving work?
How does payroll giving work?
Read through the Guide to Payroll Giving to understand how the scheme can be implemented and the role of employers, employees, payroll administrators and donee organisations.
What are the benefits of participating in payroll giving?
Payroll giving is an efficient, low-cost way to raise funds and receive regular income support.
For employees, payroll giving is an immediate, simple and rewarding way to give. People donating through payroll giving don’t need to retain receipts and wait to file an annual claim form to get their donation tax credit. Payroll giving means the donation and the 33.33 percent credit happen immediately.
How does my organisation become involved in payroll giving?
An organisation needs to be approved by Inland Revenue as a donee organisation to be eligible to participate in payroll giving. Being on the Charities Register does not automatically qualify a group as a donee organisation because only Inland Revenue approves donee status.
If your organisation is already registered as a charity with the Charities Commission and indicated that donations are a source of income on the application form, this information will be passed on to Inland Revenue and it will automatically consider donee organisation status.
You can check if you are on the approved donee organisations list on Inland Revenue’s website. If you are not on the donee list you can apply in writing to Inland Revenue.
If your organisation is already registered as a charity with the Charities Commission and indicated that donations are a source of income on the application form, this information will be passed on to Inland Revenue and it will automatically consider donee organisation status.
You can check if you are on the approved donee organisations list on Inland Revenue’s website. If you are not on the donee list you can apply in writing to Inland Revenue.
Employees of the Ministry of Social Development are now able to participate in payroll giving and can currently select from 1500 donee organisations to donate to through the scheme. If you’re registered as a donee organisation through Inland Revenue and would like to register for inclusion with the Ministry’s Payroll Giving scheme, please email Payroll Giving.
What can I do to help my organisation benefit from payroll giving?
1. Promote your charity to potential donorsInland Revenue’s list of donee organisations does not include contact details or other information. When promoting your charity, you may wish to refer people to your entry on the Charities Register. Check your details on the register to ensure they are all up to date and correct. You are encouraged to spread the news of payroll giving to your networks, to current donors and to the media.
2. Establish a system for issuing payroll giving summaries
This is not compulsory but it is recommended that donee organisations issue a payroll donation summary to the employer for their business records. The individual donor doesn’t need receipts for donations made through their payroll because their pay slip will show all the details and they have already received their tax credits.
This is not compulsory but it is recommended that donee organisations issue a payroll donation summary to the employer for their business records. The individual donor doesn’t need receipts for donations made through their payroll because their pay slip will show all the details and they have already received their tax credits.
3. Offer payroll giving to your own employees
If your organisation employs staff, be one of the first to offer payroll giving options to your employees – it will help you get to grips with how it works and you’ll gain an appreciation of what is involved in setting it up.
4. Keep donors informed
Consider how you will keep payroll givers informed about your work as you will probably not know their names and contact details – perhaps you need a newsletter for people to sign up for, a Facebook page or posters for workplaces? If existing donors switch over to payroll giving – offer them a way to stay informed about how their donations are used by your organisation.
5. Use your existing networks to get the message out
You are encouraged to spread the news of payroll giving to your networks, to current donors and to the media. This includes any volunteer staff and members of your board who may have links into businesses and could provide opportunities for you to promote both payroll giving and your organisation as a recipient donee organisation.
If your organisation employs staff, be one of the first to offer payroll giving options to your employees – it will help you get to grips with how it works and you’ll gain an appreciation of what is involved in setting it up.
4. Keep donors informed
Consider how you will keep payroll givers informed about your work as you will probably not know their names and contact details – perhaps you need a newsletter for people to sign up for, a Facebook page or posters for workplaces? If existing donors switch over to payroll giving – offer them a way to stay informed about how their donations are used by your organisation.
5. Use your existing networks to get the message out
You are encouraged to spread the news of payroll giving to your networks, to current donors and to the media. This includes any volunteer staff and members of your board who may have links into businesses and could provide opportunities for you to promote both payroll giving and your organisation as a recipient donee organisation.
It's also important to understand the challenges that employers and employees may face in coming to grips with payroll giving. Check out the employer and employee section of this site so that you are prepared for any questions potential donors might have about the scheme.
6. Consider working with intermediary organisations
You may also wish to work with payroll giving intermediaries to ensure that your organisation is promoted within their solutions as a recipient donee organisation. By understanding the offerings of each intermediary organisation you will be better prepared to inform potential donors and employers about the solutions that are available to help them participate in payroll giving.
You may also wish to work with payroll giving intermediaries to ensure that your organisation is promoted within their solutions as a recipient donee organisation. By understanding the offerings of each intermediary organisation you will be better prepared to inform potential donors and employers about the solutions that are available to help them participate in payroll giving.
For further information please contact the following organisations directly:
Additional Resources
Inland Revenue - View Inland Revenue guidelines for Payroll Giving
Office for the Community & Voluntary Sector - Read about the introduction of payroll giving and download resources for your workplace.
Giving Case Studies
Giving Case Studies