How the scheme actually works
Payroll giving — sometimes called Give As You Earn — lets employees donate directly from their gross pay before income tax is calculated. That means every pound you give costs you less than a pound, with relief applied automatically at your marginal rate. A basic-rate taxpayer giving £10 a month only sacrifices £8 from take-home pay; a higher-rate taxpayer pays just £6. No forms, no claims — the tax relief happens invisibly, every payroll cycle.
The mechanism that makes this possible is an approved Payroll Giving Agency (PGA)
The mechanism that makes this possible is an approved Payroll Giving Agency (PGA). Your employer doesn't send donations directly to charities; instead, it passes the money to one of these HMRC-approved agencies, which then distributes funds to whichever charities employees nominate. The agency handles the admin, the compliance and the onward payments. Without one in place, the scheme simply can't run — so if your employer has no payroll giving yet, setting up a PGA relationship is the first practical step.
HMRC publishes a list of approved agencies, and there are several active ones in the UK. They vary slightly in how they charge: some levy a small percentage fee on donations, others operate on a commission basis or offer fee-free arrangements for larger employers. Charities receive the remainder — so it's worth an employer asking about fee structures before signing up. Once an agency agreement is in place, employees can typically nominate any Charity Commission-registered charity, as well as some Community Amateur Sports Clubs (CASCs) that qualify under HMRC rules.
What your employer actually has to do
The setup process is more straightforward than most HR teams expect. The employer contacts an approved agency, agrees terms and signs up. The agency then provides the employer with what it needs to integrate donations into payroll: usually a process for collecting employee instructions and a way to pass the deducted amounts across each pay period. Most modern payroll software can accommodate this without significant difficulty.
There's no legal obligation on employers to offer payroll giving, but there's equally no great barrier to doing so. The administrative burden typically falls on the payroll team rather than anyone else, and once running, the scheme is largely self-managing — employees update their giving instructions, the agency handles distribution. HMRC's own guidance notes that the scheme is open to any employer who operates PAYE, which covers the vast majority of UK employers.
Some agencies offer employer toolkits: materials to help communicate the scheme to staff, templates for sign-up forms and guidance on how to present the benefit. A scheme that nobody knows about won't be used, so communications matter nearly as much as the mechanics.
Making the case if you're an employee
If you want payroll giving and your employer doesn't yet offer it, you're in a reasonable position to ask. HR and finance teams often simply haven't been asked, or assume the setup is more complex than it is. A clear, short request — explaining what payroll giving is, pointing to HMRC-approved agencies, and noting there's no cost to the employer beyond modest admin — tends to land better than a vague suggestion.
It helps to frame it as a staff benefit rather than a charitable campaign. Payroll giving costs the employer nothing directly; it's the tax system that provides the relief. Many employers find it straightforwardly positive to offer — it's listed alongside other voluntary benefits, requires no employer contribution (unless they choose to top up donations, which some do), and signals a degree of social responsibility without any significant overhead. If your company already has a workplace giving scheme of some kind, adding payroll giving to it is often the natural next step.
If there's a staff forum, a CSR working group, or even a supportive line manager, those are practical routes to getting the idea in front of the right person. A brief written note — what it is, how it works, a link to the HMRC-approved agency list — is usually enough to start the conversation.
Once a scheme is live, promoting it matters. Uptake at launch tends to be highest, then tails off; periodic reminders around pay reviews or charity awareness moments keep it visible. Employees can typically change their nominated charity or giving amount at any time, which makes the scheme genuinely flexible rather than a one-time commitment. For anyone who wants to give regularly to a cause they care about, it's one of the most tax-efficient ways to do so — and one that requires no annual claim and no receipts.