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 takes the chosen amount from your gross pay, sends 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 efficient methods a working Catholic can use to give regularly to the Church.

How the maths works

Imagine you want the diocese to receive £20 a month. If you give from your taxed income, your standing order is £20 a month, and the diocese can reclaim Gift Aid of £5, taking the total 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 reduction in your take-home pay is only £16. The diocese still receives £20. The £4 of tax you would have paid stays with the diocese as part of the gift. For a higher-rate taxpayer at 40 per cent, the £20 gift only costs £12 in take-home pay. For an additional-rate taxpayer at 45 per cent, the cost falls to £11.

The crucial point: with Payroll Giving the higher-rate and additional-rate relief is given immediately, at source. With ordinary Gift Aid you have to claim higher-rate relief through Self Assessment after the year ends. For higher-rate taxpayers, Payroll Giving is the simpler and quicker route.

Who can use Payroll Giving

You can use Payroll Giving if:

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

If you are self-employed, you cannot use Payroll Giving. Self-employed Catholics should give through Gift Aid instead, which gives the same overall result, claimed through your tax return.

Setting it up at work

The first step is to ask your employer's HR or payroll department whether Payroll Giving is available. Many large employers in the diocese, including hospitals, councils, and major companies, already have a scheme. Some smaller employers do not, but adding one is straightforward and free.

If a scheme exists, you fill in a short authorisation form. You name the charity, in this case the Shrewsbury Roman Catholic Diocesan Trust, charity number 234025, with the address Diocese of Shrewsbury, Curial Offices, 2 Park Road South, Prenton, Wirral CH43 4UX. You set the monthly amount. Your employer takes the deduction from your next pay packet and the amount appears as a line on your payslip.

If your employer does not have a scheme, the diocese can write a short letter to your HR team explaining how it works and pointing them to gov.uk's Payroll Giving guidance. Carol Lawrence, the Financial Secretary, can supply the letter on diocesan headed paper.

What about Gift Aid?

You do not Gift Aid a Payroll Giving donation. The tax relief is given at source, so a separate Gift Aid declaration is not needed and would be incorrect. This is one of the few simplifications of Payroll Giving compared to a standing order.

Some Catholics use both. They give through Payroll Giving for one fund and through Gift Aid standing order for another, particularly where they want different gifts to go to different parts of the diocese. The two systems run side by side without difficulty.

Matching schemes

Some employers match employee Payroll Giving up to a fixed amount per year. This effectively doubles the gift to the charity at no further cost to the employee. If your employer offers matching, the diocese receives both the employee's Payroll Giving amount and the employer's matching amount, often through the same agency. Always check whether matching is available before deciding the level of your monthly gift.

Stopping or changing a Payroll Giving gift

You can change the amount, pause, or stop your Payroll Giving at any time by writing to your payroll department. The diocese will be notified by the agency. Unlike a standing order to a personal bank, there is no need to involve your bank. The control sits with you and your employer.

What the diocese does with Payroll Giving income

Payroll Giving income is used in line with whatever you specify. 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 according to your instructions.

Setting it up this month

The next step is in two parts. First, ask your HR team whether Payroll Giving is available at your workplace. Second, write to Carol Lawrence, the Financial Secretary at the Diocese of Shrewsbury, at carol.lawrence@dioceseofshrewsbury.org or phone 0151 652 9855. She can confirm the exact charity reference your payroll team will need and answer any questions about how the gift will be applied. Including the diocese in your monthly payroll is one of the simplest, quietest, and most tax-efficient ways to support the work of the Church for years to come.