Member News 18th July 2019
If you want to give to our charity on a regular basis, payroll giving – or donating to charities via your salary – is one of the simplest ways to make those donations. And because it’s tax effective it’s great for us charities too.
Payroll giving comes out of your salary after National Insurance, but before tax. This means that you get tax relief on your donation, which can be passed straight on to us.
Donations made to us through your employer are taken from your pay after your National Insurance contributions are removed but before Income Tax is calculated and deducted.
This means if: You’re a standard tax payer at 20% and make a monthly donation of £20 to your chosen charity. When the money is taken from your salary you’ll be paying £16 but the remaining £4 will be money you would have paid in tax and not seen in your wages anyway.
You’re a higher rate tax payer at 40% and wish to make a monthly donation of £20 to your chosen charity. When the money is taken from your salary you’ll be paying £12 but the remaining £8 will be money you would have paid in tax and not seen in your wages anyway.
If you donate in the traditional way – after you’ve paid Income Tax on your wag-es – we would need to claim Gift Aid in order to get the tax back from HMRC.
But with payroll giving, because donations are made before tax, we don’t have to do this. Reducing the admin for us means we will have lower outgoings on resources and can focus more of our funds upon the invaluable work we do.