Payroll Giving allows you to donate to charity directly from your salary. You decide the amount you would like transferred to AAC, and your employer deducts this amount from your pay and sends it directly to AAC, where the full donation is credited to your AAC account.

Because the donation is taken before income tax is applied, the cost to you is lower. The exact saving depends on your income tax rate.

For example, if you earn £100 and want to give £20 to charity:

Basic-rate taxpayer (20%)

Without Payroll Giving:

• Tax is charged on the full £100
• You pay £20 tax, leaving £80
• You then donate £20 to charity
• You are left with £60

Result: The charity receives £20, and you are left with £60

With Payroll Giving:

• Your £20 donation is taken before Income Tax is calculated.
• Tax is then charged on the remaining £80
• 20% tax on £80 = £16
• You are left with £64

Result: The charity receives the same £20, but you are left with £64 instead of £60.

Higher-rate taxpayer (40%)

Without Payroll Giving:

• Tax is charged on your full £100 income.
• You pay £40 tax, leaving £60
• You then donate £20 to charity
• You are left with £40

Result: The charity receives £20, and you are left with £40.

With Payroll Giving:

• Your £20 donation is taken before Income Tax is calculated.
• Tax is charged only on the remaining £80.
• 40% tax on £80 = £32.
• You are left with £48

Result: The charity receives the same £20, but you are left with £48 instead of £40.

Because the donation is taken before tax is deducted from your payslip, there is no Gift Aid reclaim to complete later.

Please note that AAC applies a commission of up to 5% on payments into your account. So, in the examples above, if £20 is paid into your AAC account through Payroll Giving, AAC’s maximum commission would be £1. This means £19 would be available in your AAC account to donate to the charities you support.

When people use Payroll Giving

Payroll Giving is often used by higher-rate taxpayers for two main reasons:

1. The donation is deducted from taxable income, which can sometimes help prevent someone moving into a higher tax band.
2. As the tax is never deducted from the donation in the first place, higher-rate taxpayers do not need to wait until their annual tax return to reclaim additional tax relief.

Additionally, many employers also offer matched-giving schemes, where the company matches part of the employee’s donation. Payroll Giving can also be used by basic-rate taxpayers, particularly where employers provide matched giving or other workplace giving schemes.

Some AAC members use Payroll Giving for regular donations while also adding funds personally for additional giving during the year.

When setting up Payroll Giving, you choose how much you would like to give, either as a fixed amount or, if your employer allows this, a percentage of your salary. Your employer then deducts this amount from your pay and sends it directly to AAC, where it is credited to your account (less the standard commission charge) once received.

Payroll Giving is usually deducted monthly through your employer’s payroll system, although this may vary depending on your employer’s payroll cycle. Because tax relief is applied at source, there is no additional rebate from HMRC, and the funds remain in your AAC account until you decide how and when to allocate them.

• Complete the Payroll Giving forms below. One section is completed by you and one by your employer.
• Forms can be completed online or printed and returned by email or post.
• It normally takes one to two working days to open the account.
• The account becomes active when the first payment is received at AAC from your employer. You may wish to confirm with your payroll department when payments are made.