What are the benefits of participating in payroll giving?
Payroll giving creates a win-win opportunity for employers, employees and their communities. Through payroll giving, businesses are able to demonstrate their commitment to their customers, clients and communities in a practical way. Because payroll giving is voluntary, employers have the choice of whether to offer the scheme. It is only available to employers who electronically file their employer monthly schedule and deduction form.Further information about filing your employer monthly schedule and deduction form electronically via ir-File is available from Inland Revenue.
How does payroll giving work?
Read through the Guide to Payroll Giving to understand how the scheme can be implemented in your workplace and the role of employers, employees, payroll administrators and donee organisations.
What do I have to do to set up payroll giving within my organisation?
If you decide to offer payroll giving to your employees, you will need to make some decisions about how the scheme will operate within your organisation, including:- The process for determining which donee organisations your employees can donate to through payroll giving. Some ideas of how you could do this are:
- Allowing employees to nominate and vote for a specified number of donee organisations
- Allowing employees to select their own donee organisation(s)
- Allowing employees to vote on a number of donee organisations you have selected
- How frequently an employee can change their payroll giving selections, including:
- Recipient donee organisation
- Donation amount
- Frequency of donations
- Whether or not you will use the services of a payroll giving intermediary to help you establish and maintain your payroll giving programme. A payroll giving intermediary is an organisation that facilitates payroll giving transactions between donors and the recipient donee organisations.
Can my payroll system enable payroll giving?
Your payroll system should have been modified to allow the processing of payroll giving transactions. Check with your payroll provider to ensure that payroll giving has been enabled within your payroll system and to understand how your payroll system can facilitate the payroll giving process for employees and your payroll administrator.
A number of payroll providers have established processes beyond basic payroll giving functionality to help their clients manage payroll giving donations. You can find out more by contacting one of the following organisations:
There are also a number of intermediary organisations that have developed solutions to work in conjunction with your payroll system to facilitate payroll giving for employees, employers and donee organisations. Please contact the following organisations directly to find out how they can assist you:
How do I know if an organisation is eligible to receive funds through payroll giving?
An organisation needs to be approved by Inland Revenue as a donee organisation to be eligible to receive funds donated through payroll giving. Being on the Charities Register does not automatically qualify a group as a donee organisation because only Inland Revenue approves donee status.
You can check if an organisation is an approved donee organisation by searching the donee organisation list on Inland Revenue’s website.
What are the risks for employers and what do I need to do to ensure I am complying with Inland Revenue requirements?
As an employer you are responsible for ensuring that:
- Organisations specified by employees (to receive funds through payroll giving) are approved donee organisations. You can check if an organisation is an approved donee organisation by searching the donee organisation list on Inland Revenue's website.
- Verifying that bank account details provided by, or on behalf of, donee organisations are correct before you pass on any funds donated through payroll giving.
- Ensuring that funds donated through payroll giving are passed on to the donee organisation(s) within the two month timeframe specified by Inland Revenue. Further clarification of the time frame for passing on payroll giving donations is available in the Employer responsibilities section of Inland Revenue's website.
For further clarification of employer responsibilities please see Inland Revenue's website.
As an employer, will I be expected to match donations made through payroll giving?
While employers are very welcome to match or partially match employee donations through payroll giving, there is no requirement to this in payroll giving legislation.Employers that do choose to match employee donations through payroll giving will be entitled to to claim a deduction for all charitable donations up to the total amount of their net business income. Further information about company deductions for charitable giving is available from Inland Revenue.
Do I have to process one-off donations through payroll giving?
No. As an employer you can decide if and how the scheme will operate within your workplace, including whether or not you will allow employees to make one-off donations through payroll giving. While you might decide not to allow one-off donations through payroll giving as a general rule, you may wish to allow one-off donations for specific causes. For example, there may occasionally be a large percentage of employees who wish to make a one-off donation to a crisis appeal.If you choose to use an intermediary for payroll giving then it may be possible for your employees to make one-off donations as and when they choose, without placing an administrative burden on you or your payroll department. To find out more about the services of payroll giving intermediaries please contact the following organisations:
Additional Resources
Please see the following links for further information:Inland Revenue- View Inland Revenue guidelines for payroll giving and download resources for your workplace as well as the list of
Frequently Asked Questions on payroll giving.
Frequently Asked Questions on payroll giving.
Office for the Community & Voluntary Sector- Read about the introduction of payroll giving and related articles.
Giving Case Studies
Giving Case Studies