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Give As You Earn (GAYE) is a scheme that allows employees to donate to charities directly from their gross salary. Donations are taken from the employee’s pay before tax is deducted, providing tax relief on the donation.
GAYE is an easy and tax-efficient way to support charities, and can be an effective way for employers to encourage charitable giving among their employees. The scheme is administered by HMRC.
Before you begin
To participate in GAYE, an employee must choose a charity to support and determine the amount they would like to donate monthly. The employer then deducts the chosen amount from the employee’s gross pay and sends it to an HMRC-approved agency, which then transfers the donation to the nominated charity.
All employers will need to sign a contract with the Payroll Giving Agency before donations can commence. It can take between 35-60 days for the money to reach the charity.
Note: Charitable donations must be made after National Insurance has been deducted, but before income tax is applied.
How to set up GAYE
- Set up a Gross deduction recurring pay item in payroll. For a step-by-step guide, see How to add one-off and recurring pay items to employees.
- Use the payroll report to understand the figure that should be paid to your selected GAYE scheme provider.