What is the Payroll Giving scheme and how can it help my PTA?
Payroll Giving, also known as Give As You Earn, is an HMRC-approved scheme that allows employees to donate money directly from their salary before income tax is deducted. It’s one of the most tax-efficient ways to give to charity in the UK.
How can employers register to join the scheme?
To join Payroll Giving, an employer must sign up through an approved agency. Check the list of Payroll Giving Agencies (PGAs) on gov.uk. Once the employer has registered, employees can select a charity and set up a monthly gift. When an employee makes a donation through Payroll Giving, the amount gifted is taken from their salary before tax is applied, so if you are a basic rate taxpayer, a £1 donation would cost you 80p.
Who can donate through Payroll Giving?
Anyone employed on a Pay As You Earn (PAYE) basis can donate if their employer participates in Payroll Giving. If your company hasn’t signed up yet, suggest they join the scheme. PGAs can provide simple sign-up packs for employers.
How much can supporters give through the scheme?
While there’s no official minimum or maximum donation, supporters typically give at least £5 a month.
Must the PTA be a registered charity to receive donations?
Yes. Payroll Giving donations can only go to an HMRC-recognised charity or community amateur sports club. Use the PTA’s registered name and charity number to make sure funds end up in the right place. Once registered with the Charity Commission and HMRC, the PTA will automatically appear on HMRC’s list of recognised charities.
Will employers match donations made in this way?
Some employers match or top up employee gifts. This can increase the PTA’s income and is a strong incentive for encouraging participation.
How can we get the word out among our supporters?
At the beginning of each school year, send a letter to all families encouraging them to find out if their employer offers Payroll Giving. Extend this request to include friends and family, as well as staff at the school. The message is simple: ‘Donate from your pay, before tax, to support our children.’.
Include a table with examples to illustrate the concept. For instance:
- A £10 pledge at the basic rate of tax (20%) results in £2 saved in tax.
- This means the net cost to the donor is £8, while the charity receives the full £10.
Could the PTA potentially make a worthwhile amount?
If just 20 parents were to donate £10 each month, the PTA would make £2,400 in a year. If half of those donations are matched 1:1 by employers, the overall total becomes £3,600. Larger schools with higher participation rates could easily exceed £5,000.
What challenges might PTAs face in implementing this scheme?
Public awareness of Payroll Giving is low. A 2024 report by the Charities Aid Foundation found that ‘59% of people have not heard of it’. Employer participation is also low. On top of these issues, PTAs may also encounter difficulties with volunteer capacity, donor fatigue and competing fundraising channels. Payroll deductions can seem abstract and less fun than running an event.
Download our editable template letter to supporters
payroll-giving-template-letter (DOCX)
