It's simple, your employees ask you to deduct regular donations from their pay to their chosen charity. In other words, after calculation of National Insurance contributions, but before deduction of Pay As You Earn tax. This way your employee gets tax relief straightaway at their top rate of tax.
For example, it will only cost an employee who pays basic rate tax £8.00 to donate £10.00 to the charity of their choice (basic rate of tax is 20% from April 2008). If the employee pays higher rate tax the cost will be £6.00 to donate £10.00. See table below
|
Pledge to |
Cost to employee @ 20% tax |
Cost to employee @ 40% tax |
| £5.00 | £4.00 | £3.00 |
| £10.00 | £8.00 | £6.00 |
| £15.00 | £12.00 | £9.00 |
| £20.00 | £16.00 | £12.00 |
You pay over all the money you deduct to an Inland Revenue approved Payroll Giving Agency and they do the rest - distributing the money to the charities nominated by your employees.
Most of the administration work is incurred by the Payroll Giving Agency who, after deducting a small administration charge, will distribute the donations to the charities chosen by your Staff.
Running a Payroll Giving Scheme is good for your business because it shows that you care about your staff and the community - helping to build better employer/employee relations as well as attracting the right people to come and work for you.
For more information on Payroll Giving for your company and staff, please contact Diane Stringer on +44 (0) 29 2053 2199 or email diane.stringer@tyhafan.org
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