We’re seeing ever more companies offering their employees the chance to donate to charities through payroll giving. And employees want to contribute too – 83% of millennials say they would be more loyal to a business that enables them to contribute to social problems, according to Cone Communication’s Millennial Employee Study.

So how does payroll giving actually work and how can charities encourage businesses to use the scheme?

What exactly is payroll giving?

Payroll giving is a scheme that helps employees give to any UK registered charity directly from their gross salary (before tax is deducted) and receive immediate tax relief.

Through CAF’s own payroll giving scheme - Give As You Earn (GAYE) - more than £74m is donated to charity every year by staff at more than 2,500 companies. Over £1.3bn has been given through the scheme since 1987.

Regular income 

A regular stream of income from payroll giving donations can help you budget and plan for the future.

Tax effective 

Your charity will receive donations straight from employees’ gross salary, meaning the donations already include tax relief, so you don’t need to worry about claiming Gift Aid.

Double donations 

You can also double the donations you receive if your corporate partner offers matched funding.

How can employees give to you through payroll giving?

There are a number of reliable, accredited payroll giving providers on the market, all with their own unique offerings. At CAF, we provide three different ways for employees to give through their pay:

1. Directly to charity

Employees can sign up online through their company, choose which charities to support and their donations are passed directly to their chosen cause.

2. CAF Charity Account

Donations are deducted in the same way but they go via an employee’s own personal charity account. This can be accessed online and donations can be made to their chosen cause either by standing order or ad-hoc donations. They can even sponsor friends and colleagues or support a specific appeal you may be running.

3. Staff charity fund

Employees’ Give As You Earn (GAYE) donations are pooled so that staff can make a more substantial donation to a charity partner or specific cause.

Who's who in payroll giving?

If your charity receives donations through payroll giving, it’s likely that you have seen (and been confused by) different parties and abbreviations. 

Payroll Giving Agency (PGA)

Payroll Giving Agencies are registered charities and are regulated by HMRC. Payroll giving schemes are set up with Payroll Giving Agencies who process donations and ensure money reaches the causes employees have chosen. CAF is a Payroll Giving Agency.

Professional Fundraising Organisations (PFO)

PFOs are a UK network of experienced fundraisers who work closely with businesses and charities to promote payroll giving in the workplace. These organisations provide optional services that can increase employee participation in payroll giving by promoting its benefits. Prior to working with a PFO, a business needs to have a contract with an HMRC-approved Payroll Giving Agency (such as CAF) who administers the payroll giving scheme on their behalf.

Grow your income through payroll giving

So how can you encourage the use of payroll giving schemes so that your charity can benefit from increased giving?

Talk to your supporters 

Talking to your donors and supporters about payroll giving is the number one way to encourage donations this way. Payroll giving has arguably been a less promoted form of individual giving across the sector, so there are opportunities to be explored here. Make it clear that payroll giving is one of the ways that people can support your work, just like the NSPCC have done on their website. You can also sign-post people to payroll giving schemes, like CAF Give As You Earn, and encourage them to talk to their employers about setting one up where they work.

Engage your corporate partners 

Another way is to talk to your corporate partners about payroll giving and how they could use their schemes to encourage employees to donate to your cause. Payroll Giving Month is good time to have these conversations and drive awareness of this way of giving.

Boost your income with payroll giving

Talk to your individual supporters

Let your supporters know about payroll giving to help give you a regular payday. Encourage them to take advantage of any existing scheme or to talk to their employers about setting one up.

Give As You Earn for individuals

Engage your corporate partners

Encourage your corporate partners to set up payroll giving and help drive regular donations to your charity with our market-leading giving scheme Give As You Earn.

Give As You Earn for employers