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A payroll giving scheme enables an employee who receives payments subject to PAYE to authorise their employer to make donations to charity by deduction from their PAYE income. An 'employer' for this purpose includes the payer of a pension or of social security income and an 'employee' includes the recipient of such income. There is no limit to the amount which may be given under the scheme. Provided that the scheme is approved by HMRC, the amount of the donation is deducted in arriving at the amount on which tax deductions are calculated¹. Gift aid payments cannot be made through a payroll giving scheme², though the employee may obtain tax relief on gift aid via other means (see E1.811) .

Relief from National Insurance Contributions is not due under payroll giving, ie NIC must be calculated on the gross PAYE income before deduction of the donation³.

HMRC may grant approval of a particular scheme or a scheme of a general kind in accordance with Treasury regulations⁴. In either case, the