Christmas is the time for Payroll Giving
Equiniti Consultant Jake Flannery gives five simple steps to starting a scheme
Christmas is coming and your staff may be feeling generous. What could be a better way for them to channel their charitable side than through Payroll Giving?
Payroll Giving is a way of allowing anyone who receives their wages or pension through PAYE to GAYE. The main benefit to your employees of giving as they earn as opposed to after they earn is that their charitable contributions are deducted before tax, ensuring they get tax relief at their highest rate of income tax.
Five simple steps to implement Payroll Giving
1. Find an approved Payroll Giving agency
An agency will take care of most of the administration and will deduct a small charge to cover costs, usually about 5%. You can find a comprehensive list on the HMRC website.
2. Have your employees nominate charities
Your agency will give you nomination forms for your staff that they will return directly to the agency, ensuring that their choice is confidential to their employer and, if they want, to the charity.
3. Decide if you are going to make a contribution
Many employers like to encourage charitable giving by matching, or making an extra contribution on top of, what employees donate. Topping up donations often encourage charitable donations, so it’s worth thinking about.
4. Set up your payroll software
For most systems this will be easy. In Equiniti’s PeopleAX it is simply a case of allowing the user to attach the benefit/deduction to the employee. The benefit/deduction rules are set up in the background allowing for a tax free deduction to be made.
5. Appoint someone in your team to be responsible for Payroll Giving
They can act as a champion for your scheme, signing up employees and distributing information, or they can just be in charge of its administration, and managing your relationship with your Payroll Giving agency.
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