Glossary · UK
What is Payroll Giving?
A scheme letting employees donate to charity directly from gross pay, giving immediate Income Tax relief at their marginal rate.
Full Definition
Payroll Giving (also called Give As You Earn) is a UK scheme that lets employees donate to charity straight from their pay before Income Tax is calculated. Because donations come out of gross salary, you get tax relief immediately at your highest rate of tax, rather than the charity reclaiming basic-rate relief later as with Gift Aid. For a basic-rate taxpayer (20% in 2026/27), a GBP 10 donation costs GBP 8 in net pay; for a higher-rate taxpayer (40%) it costs GBP 6, and for an additional-rate taxpayer (45%) GBP 5.50. The employer must run an approved scheme through an HMRC-recognised Payroll Giving agency, which distributes the money to chosen charities. National Insurance is not affected, as relief applies only to Income Tax. Payroll Giving matters because it is a simple, automatic and tax-efficient way to give regularly, and it benefits causes without the charity needing to make a separate reclaim.