Give As You Earn (GAYE), commonly called payroll giving, has been around for a long time, yet many UK businesses are still ignorant of it. Because they don’t understand it or don’t have the time, many of those who have don’t engage in the system.
However, employers won’t miss out on this excellent chance, as social responsibility and awareness are higher than ever, particularly among younger groups. Employers who want to implement payroll giving or have been requested to do so should read this article and learn where to find accountant services in Warrington.
What Is Payroll Giving?
Many individuals enjoy giving to charities, and Payroll Giving is a fantastic way to do it. In essence, it’s a scheme that lets your employees give directly to any UK charity out of their gross pay while also receiving instant tax savings.
Since charities cannot claim Gift Aid, they have less administrative labour to complete. Also implied is the ability to create budgets based on anticipated recurring donations.
Any employee who pays taxes through Pay As You Earn (PAYE) can make charitable contributions through payroll giving. There are no restrictions on the gift’s size either.
What Can Benefits Payroll Donations Provide For Employers?
Payroll giving has huge financial benefits for employers and clear benefits for charity. They include:
Improving The Company’s Reputation
First and foremost, giving to charities is a wonderful deed. But it also shows stakeholders how committed your company is to supporting deserving causes and how much you and your staff value their input.
Contributing To The Corporate Responsibility Objectives
Payroll donating is another method for boosting present corporate social responsibility (CSR) involvement. It’s a great way to accomplish more general CSR objectives and raise employee engagement.
Obtaining External Recognition
By taking part in a payroll-giving program, your business might gain acknowledgment for its charitable contributions. This is accomplished by officially sanctioned quality marks that aid in elevating your business’s employer appeal.
It Is Easy To Use
You don’t have to choose a particular payroll team member to manage your program. With access to user-friendly support for accounting services, everything is done online.
Helping You Understand Your Staff More Fully
The kind of charities close to your employees’ hearts might surprise you! This gives you a chance to get to know them better and encourages the growth of an engaged crew.
What Benefits Are There For Charity?
The main advantage of payroll giving for charity is the reliable, continuous funding it provides. Because there is less room for speculation, they can better plan their initiatives and income.
How Can We Get More People To Participate In Payroll Donations?
Employee payroll giving can be encouraged in some ways (if they aren’t already knocking down the door for it). Many companies will match any charitable contributions their employees make, which can be a great motivator (more on later).
Furthermore, some companies work with a Professional Fundraising Organisation (PFO) that focuses on face-to-face meetings with personnel. Your promotional activities’ sign-up rates may rise significantly as a result.
In What Ways Do Taxes Affect Workers?
As stated before, Payroll Giving is taken from an employee’s paycheck before taxes but after National Insurance deductions. This implies that gifts are eligible for tax benefits, which may be given to the charity. Naturally, higher-rate taxpayers benefit the most.
Contributions From Employers And Basic-Rate Taxpayers
Every £1 earned by employees who pay tax at the basic rate results in a tax obligation of 20p. If people sign up for a Payroll Giving program and pledge (for example) £10 per month, only £8 is withdrawn from their take-home pay, but the charity receives the full amount.
And For Those Who Pay Greater Rates Of Tax?
If a person agrees to pay £10 per month at the higher 40% tax rate, just £6 will be taken out of their net earnings.
If you or one of your workers makes a Gift Aid donation and pays tax through either Self Assessment or your tax code that is greater than the basic rate, you may be able to deduct the difference from the gift.
Conclusion
Payroll giving is a great way for employers to encourage their employees to give to charity. It is simple to set up and can be done through various payroll providers. Payroll giving is also a tax-efficient way to give, as donations are made before tax is deducted. This means that more of the donation goes to the chosen charity. Employers can promote payroll giving by matching employee donations or offering incentives from business finances for employees who give.
Accountancy247 offers cost-effective, high-value solutions tailored to each client’s needs, regardless of the size of the client’s business. Contact us for accountant services in Warrington!
