How Payroll Giving Works in the UK (2026 Step-by-Step Guide)

Payroll Giving (also called Give As You Earn, or GAYE) is the simplest, most tax-efficient way for an employee in the UK to donate to charity. It was created under the Charitable Deductions (Approved Schemes) Regulations 1986 and went live in April 1987. It’s run jointly by HMRC and a number of approved Payroll Giving Agencies, and it works almost identically across every UK employer that offers it.

Here’s how it works, end to end.

Step 1 — The employer signs up with a Payroll Giving Agency

To offer Payroll Giving, an employer registers with an HMRC-approved Payroll Giving Agency (PGA). HMRC publishes the full list of approved agencies — there are 23 in total, but the UK market for general employers is dominated by three:

• Charities Trust
• Charities Aid Foundation (running CAF Give As You Earn)
• Charitable Giving

Sign-up is free for the employer. PGAs charge a per-donor admin fee — Charities Trust publishes a flat 25p per donor per month; the others quote per employer. Many employers absorb the fee so 100% of the donation reaches the charity.

See our comparison: Best UK Payroll Giving Agencies 2026.

Step 2 — The employee chooses a charity and an amount

The employee picks any UK registered charity (or several) and how much they want to donate per month. Most schemes accept fixed monthly amounts from £1 upwards, with no upper cap.

The donation comes out of gross pay — that is, before income tax is calculated. This is the bit that makes Payroll Giving meaningfully better than a Direct Debit:

Donation	Cost to a basic-rate (20%) taxpayer	Cost to a higher-rate (40%) taxpayer	Cost to an additional-rate (45%) taxpayer
£10/month	£8	£6	£5.50
£50/month	£40	£30	£27.50

The employer doesn’t lose anything — National Insurance is calculated after the deduction too, but the employer pays employer’s NI on a slightly lower base. Net cost to the business: zero (or marginally positive).

For more detail on the maths, see Payroll Giving tax relief in the UK.

Step 3 — Payroll deducts the donation each pay run

Once the employee fills in the agency’s authority form (paper or digital), payroll adds them to the deduction list. From the next pay run onwards, the donation appears as a line on the payslip — usually labelled Payroll Giving or GAYE — and is paid across to the Payroll Giving Agency along with any other employees’ donations as a single bank transfer.

Step 4 — The agency pays the charity

Within a few weeks of receiving the bulk transfer, the PGA splits the funds out to the charities the donors named. Most agencies confirm receipt to the donor by email or via a portal.

Step 5 — Reporting and the Quality Mark

Most employers report participation rates internally as a CSR metric. The Payroll Giving Quality Mark is a recognition scheme administered by the Association of Payroll Giving Organisations that rewards employers based on the percentage of staff who participate — five tiers from Bronze (1%), Silver (5%), Gold (10%), Platinum (20%), to the top-tier Diamond award (30% participation plus an additional commitment such as employer-paid agency fees, matched giving, or active scheme promotion).

Where Payroll Giving fits in your wider giving programme

Payroll Giving is often the cornerstone of a workplace giving programme, but it works best when paired with:

• Matched giving — the company doubles employee donations
• Paid volunteer leave — the time half of giving
• A Charity of the Year programme — focuses fundraising effort

If you’re starting from zero and have under 50 staff, our advice is: launch Payroll Giving first (lowest effort), add 1–2 paid volunteer days next, then layer matching on top once participation is healthy.

Sources

• HMRC Chapter 4: Payroll Giving (detailed guidance)
• HMRC: List of approved Payroll Giving Agencies
• Charities Trust — published donor terms (25p/month flat fee)
• Association of Payroll Giving Organisations — Quality Mark thresholds

---

FAQs — JSON-LD enabled

Questions HR keeps asking.

How long does Payroll Giving take to set up?+

Most UK Payroll Giving Agencies onboard a small employer in 1–2 weeks. The longest part is usually waiting for payroll to slot the deduction into the next pay run.

Can employees change their donation amount whenever they like?+

Yes. Employees can increase, decrease, pause, or cancel their donation at any time by contacting the Payroll Giving Agency or HR. Changes take effect from the next pay run.

What happens to the donation if the employee leaves?+

Donations stop automatically with the final payslip. Some agencies offer a personal continuation option so the donor can carry on giving by Direct Debit if they want to.