To be eligible to participate in the payroll-giving scheme, you must be an employee of the University of Cambridge and receive your salary through PAYE. As payroll giving is a deduction from pay, it is not covered by the same minimum wage restrictions as salary exchange schemes.
The payroll-giving scheme makes donations to your chosen charity directly from your salary after national insurance contributions are calculated but before income tax is deducted. You do not pay tax on the donation, only on the remaining amount, so tax relief is given immediately on the donation. Tax relief is calculated at your highest rate of tax.
For example if you are a 20% tax payers it would only cost you £8 to make a £10 donation. If you are a 40% tax payers it would only cost you £6 to make the same sized donation to your chosen charity.
Further examples are provided below:
|Employee donation||Cost to employee
(20% tax payer)
|Cost to employee
(40% tax payer)
|Value of contribution to charity|