Give as you earn

(3 minutes to read)

The payroll-giving scheme, also known as Give As You Earn (GAYE), was set up by the government in 1987.

This scheme enables anyone receiving pay that is subject to PAYE deductions, to donate to any charity or religious organisation from their gross pay. This will reduce the donor’s tax liability, as well as benefit the many charities out there that need our continued support.

Today, payroll giving is an important source of income for charities. Presently 70% of the UK’s population gives to charities, but over £900 million is being lost by charities, as they are not receiving the tax on these donations.

By donating through a payroll-giving agency, such as South West Charitable giving the donation to your chosen charity is worth at least 28% more!

Payroll giving is becoming increasingly popular. In 2000-2001, £37 million was annually raised through this scheme, and by last year this figure had risen to over £95 million!

South West Charitable giving has been approved as a payroll-giving agency at the inception of the scheme in 1987. They have earned, through their dedication and experience a nationwide recognition as a first class agency & they alone are currently process over 125,000 donations per month.

For a higher rate taxpayer, payroll giving is the ONLY way that a charity can automatically receive all your tax on your charitable deduction.

Employees pledge to charity Cost to Employee

(20% basic rate tax )

Cost to Employee

(40% higher rate tax)

£5.00 £4.00 £3.00
£10.00 £8.00 £6.00
£50.00 £40.00 £30.00
£100.00 £80.00 £60.00

How does it work?

An employee authorises his/her employer to deduct regular charitable donations to the specified charity from his/her pay. Donations are deducted before PAYE tax is calculated.

Why is donating to GAYE so beneficial?

For the donor: As the deduction is made before PAYE tax is calculated, the donor pays tax only on the balance. With GAYE, in effect the employee gets tax relief immediately at the highest rate of tax he/she pays.

For the charity: GAYE creates a regular flow of funds for the selected charity or charities. It is also beneficial to the charity as it will receive the tax that would have been sent to the Chancellor of Exchequer had you made the donation in any other way.

What are the benefits:

  • You can make contributions to a charity/charities of your choice
  • A regular income for the charity so they can plan for the future with confidence
  • A confidential, easy & tax-efficient service
  • No extra paperwork for the charity as they receive your donation and tax in one go
  • A flexible scheme which allows you to change charities, alter the amount given or stop whenever you wish

Who can be supported?

You can donate to any recognised or registered charity or charities in the UK, large or small. You can also give to organisations recognised by the IR as charitable, including hospital appeals, school organisations, places of worship, scout groups and other similar bodies. However, tax rules exclude donations through GAYE to charities abroad.

For more information regarding the GAYE scheme, or to set this up please contact your personal Contract Manager on 01206 761 326.

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