Give as You Earn GAYE Payroll Giving Schemes

A simple guide to the UK charity Give as You Earn scheme - what is GAYE, the benefits, how to find a company and agency, and set up a payroll giving scheme for charities. Since 2015/16, employee charity donations from salary through the give as you earn scheme has fallen by 15%, so there's scope to grow that again and in the tax year ending 2022 £128 million was donated, so the funding secured can be significant. And there's scope to grow your relationship with the company and also to engage employees in other ways.

What is the UK Charity Give As You Earn Scheme?

Payroll Giving, also known as the UK Give as You Earn scheme, allows employees to make charity donations from their salary before tax but after National Insurance contributions. This method of giving is both tax-efficient for employees and beneficial for charities.

Give as You Earn Scheme - a Missed Opportunity

CAF's Payroll Giving Report 2024, found that only about 4,000 organisations currently provide this benefit, but there are 45,000+ UK employers that could offer it. There are also currently 30 million people on PAYE who could be eligible to give through Payroll Giving.

It found that 59% of people have not heard of Payroll Giving, with greatest opportunity among millennials who increasingly want to work for a company with a social purpose. Younger employees are the most likely to say they would use a Payroll Giving scheme (36% of 16–34-year-olds). The report suggests ways to encourage take-up, including making it easy to opt in and out, and matching donations.

Public Sector Give As You Earn

Public sector cuts to charity funding have been huge and may well even get worse. However, there are more than o.5 million civil servants and payroll giving is almost cost free for employers. We argue that.

Government should have a policy of ensuring departments, agencies, NDPB and local government offer payroll giving and should actively promote it across all of them to encourage take-up.
The policy should be for staff to nominate their own local charities not having a single, or limited number of the usual large charities.

That probably won't happen, so we suggest local charity groups and infrastructure bodies consider lobbying their local councils, NHS or government bodies based locally to adopt payroll giving.

Register, then login to Charity Excellence, then open its Help Finder directory. Run a search for payroll giving in its Key Word search for a list of companies. It can also find companies that donate to charity, offer charity of the year, charity partnerships, match funding and raffle prizes.

Give As You Earn Scheme Benefits to a Company

Implementing a Payroll Giving scheme is a great way for a company to:

Champion the causes it's passionate about.
Doing so enhances a company’s corporate social responsibility profile.
It demonstrates commitment to charitable causes and can boost employee morale and engagement by supporting their philanthropic interests.
It's also cost-effective and flexible, and any matching payments or costs can be offset against profits, thereby reducing Corporation Tax.
Employers can choose to match donations in full, in part, or include a monthly matching cap to suit all budgets.
Additionally, it can improve a company’s reputation and potentially attract positive attention and talent.

How Do We Set Up GAYE Payroll Giving

For setting up payroll giving, a company needs to partner with a recognised Payroll Giving agency. The agency will handle the donations and distribute them to the chosen charities. The process involves making deductions each payroll cycle and sending them to the agency.

How Do We Find a Give As You Earn Agency?

Here's a list of payroll giving agencies approved by HMRC.

How Do We Maximise the Benefits of Give As You Earn?

To maximise the benefits of your Give As You Earn scheme:

Promote Awareness: Effectively communicate the scheme’s benefits to potential donors.
- A promotional leaflet and sign up form in new arrival inductions packs, posters, hosting visits to or company events at your premises.
Keep it Simple: Ensure the donation process is straightforward for donors.
Engage Your Company: Build a strong ongoing relationship with them by demonstrating the benefits you are delivering for them through payroll giving.
Recognise Donors: Acknowledge and thank donors to encourage continued support.
Monitor and Report: Keep track of donations and report on the impact they have made.

Other ideas might include.

Running a promotional campaign to encourage staff to sign up, perhaps with entry in a prize draw for those who do.
Providing in-person assistance at your partner’s workplace.

What is GAYE Payroll Giving Month?

Payroll Giving Month takes place each February to raise awareness of the scheme amongst employees, employers, and charities. It is a great time to encourage more employees to support your cause via Payroll Giving but there is also an option of running one-off campaigns with your corporate partners.

What are the Tax Benefits of a GAYE Scheme?

The primary tax benefit of a payroll giving scheme is that donations are deducted from employees’ gross pay, meaning before tax is applied. This allows employees to give more while paying less, as they receive immediate tax relief at their highest rate of tax. There is sometimes confusion with Gift Aid which allows charities to reclaim the basic rate tax already paid on donations by UK taxpayers, increasing the value of the donation at no extra cost to the donor. In essence, Payroll Giving benefits the donor with tax relief, while Gift Aid benefits the charity by boosting the donation amount.