Younger employees shun payroll giving

Only 3% of UK employees donated to charity through their payroll in 2011/12, according to research published by the Charities Aid Foundation (CAF) in January.

The research also found that only 1.9% of under-30s in employment gave through payroll, compared with 4.5% of staff aged between 30 and 49, and 3.9% of those between the ages of 50 and 64.

Chantell Mills, senior company relations manager at CAF, said: “The generation gap was pretty big. Older staff have grown up with this notion of giving and they might have more disposable cash with which to do so.

“With the strains on graduates and younger people in general, maybe finding the extra funds to support causes is more difficult.”

The payroll-giving scheme, introduced in 1987, enables staff to donate to charity from their gross pay before tax is deducted. The CAF research showed the number of people giving through payroll nearly trebled between 1999 and 2003.

Peter O’Hara, managing director at Workplace Giving UK, said: “About 45% of the working population still can’t give from their pay because their employers don’t offer the scheme. I would encourage every employer to look at putting a scheme in this year to help charities, to help their communities.”

Media firm Mindshare put a giving scheme in place in October 2012 and achieved 12% take-up on its first day. Jennifer Healy, HR director at Mindshare, said: “In terms of overall engagement, employees are keen to ensure they feel good about their employer, morally and ethically. They also want to give something back to the greater good.”

Mindshare staff are also allowed to take a day off each year to volunteer, while employees at Visa Europe can have up to three paid volunteering days. Visa Europe also has a payroll-giving scheme, and matches employees’ contributions.

Fiona Wilkinson, senior vice president, corporate communications at Visa Europe, said: “Volunteering and fundraising are central to our culture. Our contribution to the community relies on our people, so when they give their time to good causes, we want them to benefit too.”

Business in the Community has relaunched its annual Give and Gain Day, which will be held on 17 May 2013. Since it was launched in 2008, more than 60,000 people located in 31 countries have taken part.

Read about the government’s new consultation into payroll giving

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Donating to charity cost-efficiently

  • Payroll-giving donations are made after national insurance (NI) contributions are calculated, but before income tax is deducted, so donors get tax relief immediately at their highest rate of tax.
  • For example, at a basic tax rate of 20% on a monthly donation of £10, an individual saves £2 tax, while the actual cost of the donation is £8.
  • Give-as-you-earn (GAYE) is the name of the Charities Aid Foundation’s scheme.