"Payroll Giving provides an incredibly powerful platform for companies to support giving in the workplace and can be a lifeline for charities"

Hard-pressed charities are missing out on millions as fewer employees donate through Payroll Giving, research from the Charities Aid Foundation (CAF) has found.

Since its launch in 1987, Payroll Giving has seen periods of rapid growth, particularly in the late 1990s.

Employers have the option to provide staff with a Payroll Giving scheme, also known as Give As You Earn, which works in a similar way to salary sacrifice by providing employees with a simple and tax-efficient way to make regular donations to charities.

But despite its benefits to charities and for responsible businesses, fewer employers are now offering Payroll Giving to their staff. 

• The total amount donated to charities via the scheme fell 7% year on year from £137 million in 2021 to £128 million in 2022, the most recent year for which data is available.
• The latest data shows the number of employees using Payroll Giving has fallen by 13% since 2020, to just 516,000 employees.
• But there are currently 30 million people on PAYE who could be eligible to give through Payroll Giving. 
• Only around 4,000 organisations currently provide this valuable benefit, including the likes of Tesco, AstraZeneca and government departments. Although there are more than 45,000 employers in the UK who could offer the scheme.

However, there are clear opportunities to turn this downward trend around. Polling commissioned by CAF shows that 59% of people have not heard of Payroll Giving, pointing to a need to increase knowledge and understanding among the general public.

CAF’s research also shows the opportunity is greatest among the millennial generation of employees and jobseekers who increasingly want to work for a company with a social purpose.

Younger employees are the most likely to say they would use a Payroll Giving scheme (36% of 16–34-year-olds). Although affordability can be seen as a barrier to giving, employers can take steps to encourage take-up such as making it easy to opt in and out, and matching donations.

Neil Heslop, chief executive of CAF, said: “It’s concerning that the number of employers and employees taking advantage of this valuable benefit is declining. Payroll Giving provides an incredibly powerful platform for companies to support their giving in the workplace and can be a lifeline for charities at a time when their incomes are squeezed.

“That’s why we would like to see a renewed and joined-up focus on promoting Payroll Giving from providers, employers and the Government. For individuals who can afford to give, it’s a simple way to donate regularly or even on an ad-hoc basis to causes that matter to you.”