Setting Up Payroll Giving: The Agent and Everything Else You Need to Know
Payroll Giving, also known as ‘Give As You Earn’ (GAYE), is the most tax-efficient method for donating to charities in the UK. The scheme has been created to allow employees to donate regularly from their salaries (or pensions, if retired) and get immediate tax relief on their contributions. Here is some important information, such as how to pick a Payroll Giving Agent, how to set up your scheme, and how to get your staff onboard with Payroll Giving.
How to set up Payroll Giving
Payroll Giving comes with many benefits but one disadvantage is that is difficult to set up. That’s why it may make sense to get third-party advice on how to navigate the steps easier.
- The first thing you need to think about is: in order to be able to use the scheme, you need to have a Payroll Giving Agent. An important point to highlight is that some companies can also offer you a separate service; the management (software) of your Payroll Giving scheme. In this case, you would still have to select a Payroll Giving Agent that will process the Payroll Giving. This would mean that you would be engaging with 2 parties. Here is a list of HMRC-approved Payroll Giving Agents (including the KindLink Foundation).
- The Agent should sign an agreement with your company to process your charitable contributions. In addition, the agent needs to provide your employees with a signup form where they confirm their employee personal details, the amount, and charity they want to donate to.
- While this sounds straightforward it is not necessarily so. In some instances, signing up with a Payroll Giving Agents can be a hassle because of the many bureaucratic processes that are still in place.
When choosing your Payroll Giving Agent there are a couple of things you should keep in mind:
- You should think about the employee experience and the support that the Payroll Giving Agent will provide to you as a company. Be aware that your Payroll or accounting team will need to deal with the Agent’s reports on a monthly basis so you would like to have a service that runs as smoothly as possible from the beginning. Your employees should get an online form/portal that is easy to operate and user-friendly so all your employees can navigate it. Be careful about the fees you are being charged – some providers charge around 4.5% – 5% as well as a setup fee.
- At this point, it is good to mention you have a few variables when you choose how to set up your Payroll Giving. Firstly, you will have to choose who will cover your agency’s fees. These will be covered either by your company or by a proportion of your employees’ donation, which means that the charity would receive less. Secondly, you need to choose whether your company will be matching your employees’ Payroll Giving donations. Your Agent should give you flexibility with this, offering you options to match the minimum and/or maximum amounts as well as the possibility to match a specific percentage of the employees’ donations.
How to manage Payroll Giving
After you have set up the scheme via your Agent, start communicating with your staff about the programme. Payroll Giving is the most tax-efficient way to donate so communicating this to your staff and getting them to engage is key for success. Matching the donations of your employees will go a long way towards raising your employer brand internally.
There are two options for how to manage getting people on board with your company’s Payroll Giving. Your first option is to ask your internal communications team to form an ongoing promotional campaign to educate and engage staff. Your second option might choose a third-party to help promote Payroll Giving internally.
Whichever option you decide to go for, here are a few mandatory elements you need to include in the promotion of your initiative. Your Payroll Giving Agent should be able to help you with collateral and information for all of these:
- Prepare a full promotional schedule/calendar and communicate about it once or twice a week. This way you ensure that you will reach everyone in the company.
- Involve your leaders. This will greatly drive your internal engagement.
- Make sure your communications are consistent and to the point.
- Do a proper launch where you talk about Payroll Giving extensively on all channels, for at least one or two weeks.
- Make sure you cover all internal channels: newsletter, chat, intranet pages, weekly meetings, company-wide conferences, paper flyers and banners.
- Track your success and sign-ups and repeat the most successful campaigns.
Remember – the bigger the involvement of your employees, the better your staff engagement and the better your retention rates. The correlation is direct and statistically proven!
(KindLink is the technology platform supporting corporates in managing their CSR, offering features ranging from CSR strategy development and Payroll Giving scheme to measuring SDGs, employee engagement and volunteering opportunities marketplace)