What Payroll Giving is

Payroll Giving, also called Give As You Earn, is a UK government scheme that lets you give to charity directly from your salary before income tax is taken. Your employer deducts the chosen amount from your gross pay, passes it to the charity through an HMRC-approved Payroll Giving agency, and the rest of your salary is taxed as normal. The result is a charitable gift that costs you less than its face value, because you never pay tax on the amount given.

For the Diocese of Shrewsbury, registered charity number 234025, Payroll Giving is one of the most tax-efficient methods a working Catholic can use to give regularly to the Church.

How the figures work

Suppose you want the diocese to receive £20 a month. If you give from your taxed income, you set up a standing order for £20, and the diocese can reclaim Gift Aid of £5, bringing the total received to £25.

If you give £20 through Payroll Giving instead, the £20 comes out of your gross pay before tax. For a basic-rate taxpayer at 20 per cent, the actual fall in take-home pay is only £16. The diocese still receives £20. For a higher-rate taxpayer at 40 per cent, the same £20 gift costs just £12. For an additional-rate taxpayer at 45 per cent, the cost falls to £11.

The important point for higher-rate and additional-rate taxpayers is that the relief is given immediately, at source. With ordinary Gift Aid, higher-rate relief has to be claimed through Self Assessment after the year ends. Payroll Giving delivers that saving without the paperwork.

Who can use it

You can use Payroll Giving if:

• You are paid through PAYE (which covers most employees in the UK)
• Your employer has set up a scheme with an HMRC-approved Payroll Giving agency, such as Charities Trust, Charitable Giving, or the Charities Aid Foundation
• You pay UK income tax

Self-employed Catholics cannot use Payroll Giving, since there is no employer payroll to deduct from. The equivalent benefit is achieved through Gift Aid, claimed on your Self Assessment return.

Setting it up at work

The first step is to ask your employer's HR or payroll department whether a scheme is already in place. Many large employers within the diocese, including hospitals, councils, and sizeable companies, have one. Some smaller employers do not, but setting one up is straightforward and costs the employer nothing.

Once a scheme exists, you complete a short authorisation form naming the charity (Shrewsbury Roman Catholic Diocesan Trust, charity number 234025, Diocese of Shrewsbury, Curial Offices, 2 Park Road South, Prenton, Wirral CH43 4UX) and setting the monthly amount. Your employer makes the deduction from the next pay run, and the amount appears as a line on your payslip.

If your employer does not yet have a scheme, the diocese can provide a letter for your HR team explaining how it works and pointing them to the gov.uk Payroll Giving guidance. The Financial Secretary can supply the letter on diocesan headed paper. Their details are listed below.

Payroll Giving and Gift Aid

You do not add Gift Aid to a Payroll Giving donation. Because the tax relief is built into the deduction at source, no separate Gift Aid declaration is needed, which is one of the genuine simplifications Payroll Giving offers over a standard standing order.

Some Catholics use both methods. They give through Payroll Giving to one fund and by Gift Aid standing order to another, directing different gifts to different parts of the diocese. The two run side by side without difficulty.

Employer matching

Some employers match employee Payroll Giving up to a fixed annual amount. Where matching is available, the diocese receives both the employee's Payroll Giving amount and the employer's contribution, often through the same agency. This doubles the value of the gift without any additional cost to the employee. It is worth checking whether your employer offers matching before settling on the level of your monthly gift.

Stopping or changing a gift

You can change the amount, pause, or stop your Payroll Giving at any time by contacting your payroll department. There is no need to involve your bank. The diocese will be notified by the agency. The arrangement remains entirely in your control.

What the diocese does with the income

Payroll Giving income is applied in line with your instructions. You can direct the gift to the general charitable purposes of the diocese, to a named fund such as the Retired Priests' Fund or the Clergy Education and Training Fund, or to a particular parish. The Payroll Giving agency passes the gift to the diocese, and the diocese applies it accordingly.

Setting it up this month

Two steps: first, ask your HR team whether a Payroll Giving scheme is available at your workplace. Second, use the contact below to confirm the charity reference your payroll team will need and to discuss how the gift will be applied. Including the diocese in your monthly payroll is one of the most tax-efficient ways to give to the Church for years to come.