By PaySlipCheck Editorial
· Reviewed by PaySlipCheck Editorial Standards Team
· 14 June 2026
· 5 min read
Payroll Giving lets UK employees donate to registered charities directly from their gross salary — before Income Tax is deducted. That makes it one of the most tax-efficient ways to support charity. Basic-rate taxpayers effectively pay 80p for every £1 donated, higher-rate taxpayers pay 60p, and additional-rate taxpayers pay 55p — with the charity receiving the full £1 either way. Many UK employers also match donations pound-for-pound, doubling the impact. This guide covers eligibility, the setup process, the tax mechanics + how it compares to Gift Aid claims via Self Assessment.
Verified against 2 official sources · Last reviewed 14 June 2026
Agency forwards net amount to charity within 60 days
Tax mechanics
Marginal rate
£10 donation costs employee
Charity receives
Basic (20%)
£8
£10
Higher (40%)
£6
£10
Additional (45%)
£5.50
£10
Scottish top (48%)
£5.20
£10
Note: NI is still deducted; only Income Tax is skipped.
Payroll Giving vs Gift Aid
Payroll Giving: Automatic relief at marginal rate. No admin.
Gift Aid: Charity claims basic-rate relief; higher/additional-rate donor claims difference via Self Assessment.
Which is better? Payroll Giving is cleaner for higher/additional-rate taxpayers (no SA claim needed). Gift Aid keeps the tax relief with the charity for basic-rate donors.
Employer matching
Many UK employers match Payroll Giving — either £-for-£ or capped %. Improves employee engagement + retention. Employers can also claim Corporation Tax relief on matched amount.
Setup
Employee: request via HR/payroll
Employer: sign up with Approved Payroll Giving Agency (Charities Aid Foundation, Give As You Earn, others)
Cost to employer: typically 25p per transaction (some agencies free)
In short
Payroll Giving = tax-efficient charity donation. Basic donation £8, higher-rate £6, additional-rate £5.50 to give £10.
Frequently asked questions
Is Payroll Giving better than Gift Aid?
For higher/additional-rate donors, yes — auto-relief without Self Assessment claim. For basic-rate, similar economic outcome.
Can I choose any charity?
Any UK-registered charity. Some Payroll Giving Agencies also cover non-UK causes.
Can I stop or change my Payroll Giving amount?
Yes — via HR/payroll at any time. Changes take effect from the next payroll run.
Do I pay NI on the donation?
Yes — Payroll Giving skips Income Tax only. Employee NI still applies on the donation amount.
What if I change job?
Payroll Giving arrangement doesn't transfer. Re-enroll with new employer's scheme.
UK monthly budget planner — A workable UK monthly budget planner: confirm your real net pay, list fixed essentials, list variable essentials, set a discretionary cap, set a savings target. Total must equal net pay. Use 50/30/20 as a starting guide, adapt for your housing situation.
More on related topics
Attachment of earnings — AEO = court order requiring employer to deduct debt from wages. Protected earnings threshold applies.
Auto-enrolment duties — Auto-enrolment = employer duty since 2012. 8% total minimum. Re-enrolment every 3 years.
Bank holidays — No statutory right to bank holiday off. Contract decides. 2026 UK has 8 bank holidays.
All tax figures on this page use the same configuration that powers our
calculators — see our
editorial standards for the review process.
Last reviewed: 14 June 2026.
Next review due 14 December 2026.
Disclaimer: This page provides general information based on published HMRC and gov.scot figures. It is not personal tax or financial advice. For your specific situation, please consult a qualified accountant or contact HMRC directly.