Payroll Giving calculator: what a donation really costs you
Payroll Giving comes out of pay before Income Tax but after NI. See what a donation costs at your tax rate, what the charity gets, and Gift Aid compared.
Payroll Giving takes your donation out of your pay before Income Tax but after National Insurance, so you get tax relief at your top rate straight away. Outside Scotland, every £1 you give costs you 80p as a basic-rate taxpayer, 60p at the higher rate and 55p at the additional rate in 2026/27. An agency fee, if one is taken from your donation, reduces what the charity receives. The charity cannot add Gift Aid on top (GOV.UK Payroll Giving). Enter your salary and donation to see your figure.
Enter your figures and press Work it out.
How Payroll Giving works
- The law. Under ITEPA 2003 s.713, when your employer (or pension payer) withholds donations at your request, the amount is "allowed as a deduction" from your taxable earnings in working out your net taxable earnings for the year. It has to be withheld under an HMRC-approved scheme and paid to an HMRC-approved agent, which pays it to the charities you name (s.714).
- Income Tax relief, not National Insurance. GOV.UK: the donation is "taken from your employees' pay before tax but after National Insurance". Your National Insurance is the same as if you gave nothing; only the Income Tax falls. If your pension provider runs a scheme, you can also give from your pension (GOV.UK).
- Your employer must run a scheme. It contracts with a Payroll Giving agency, makes the deductions each payroll and sends them to the agency. HMRC publishes a list of approved agencies, though it includes only those that asked to be listed.
- Agency fees. Agencies may charge an administration fee and usually take it out of the donations before passing them on, unless the employer chooses to pay it. The employer can deduct the costs of running the scheme from its taxable profits (GOV.UK; HMRC BIM45195).
- No Gift Aid on top, and no sports clubs. Charities cannot claim Gift Aid on Payroll Giving donations, and you cannot give to a community amateur sports club (CASC) through Payroll Giving.
- On your payslip the donation is a deduction from pay. Your pay for Income Tax is lower by the donation; your pay for National Insurance is not. See payslip explained for where it sits.
What £10 a month costs you in 2026/27
Your relief is your Income Tax rate on the donation. Outside Scotland the rates are basic rate 20%, higher rate 40%, additional rate 45%; in Scotland, starter rate 19%, Scottish basic rate 20%, intermediate rate 21%, higher rate 42%, advanced rate 45%, top rate 48%. Each figure below assumes the job is your only income and shows your statutory liability for the year (as if your tax code reflects your allowance), worked out by the calculator above.
| Salary | Where | Tax relief | Cost to you | Same gift via Gift Aid |
|---|---|---|---|---|
| £30,000 | England, Wales, NI | £2 | £8 | £8 |
| £80,000 | England, Wales, NI | £4 | £6 | £6 |
| £110,000 * | England, Wales, NI | £6 | £4 | £4 |
| £200,000 | England, Wales, NI | £4.50 | £5.50 | £5.50 |
| £15,000 | Scotland | £1.90 | £8.10 | £8 |
| £35,000 | Scotland | £2.10 | £7.90 | £7.90 |
| £60,000 | Scotland | £4.20 | £5.80 | £5.80 |
| £80,000 | Scotland | £4.50 | £5.50 | £5.50 |
| £200,000 | Scotland | £4.80 | £5.20 | £5.20 |
* Income above £100,000: the Personal Allowance (£12,570) is reduced by one-half of the adjusted net income over £100,000 (ITA 2007 s.35(2)). Because Payroll Giving lowers that income, each £1 given also restores 50p of allowance, so relief is higher than the headline rate. "Same gift via Gift Aid" is your cost after any higher-rate claim, for the charity to receive the same £10.
Payroll Giving vs Gift Aid
With Gift Aid you give from taxed income and the charity claims basic-rate tax back: 25p for every £1 you give. If you pay tax above the basic rate you claim the difference through Self Assessment or a tax code change. The law does this by treating the gift as made after basic-rate tax and moving your band limits up by the grossed-up gift (ITA 2007 s.414; the charity's claim is ITA 2007 s.520 for a charitable trust, or CTA 2010 s.475 for a charitable company).
Higher-rate example, outside Scotland. Giving £100 a month through Payroll Giving, the charity gets £1,200 a year and your take-home falls by £720. To give the charity the same £1,200 through Gift Aid you would donate £960, the charity would claim £240, and you would claim back £240: also £720. For the detail of that claim see the Gift Aid higher-rate tax claim guide.
- Timing. Payroll Giving relief at your rate arrives in the same payslip (in the taper zone, the extra relief from restored Personal Allowance comes through your tax code or Self Assessment). Higher-rate Gift Aid relief waits for a tax return or a tax code change, and you have to remember to claim it.
- Agency fee. If the agency takes a fee from your donation, the charity gets less through Payroll Giving. The calculator shows the effect.
- Paying enough tax. Gift Aid donations qualify only if they are not more than 4 times the tax you paid in the tax year; if the charity reclaims more than you paid, HMRC may ask you for the difference. Payroll Giving has no such condition: if you pay no Income Tax you simply get no relief.
- Scotland. Both routes follow the Scottish bands. The one difference is at the starter rate: Payroll Giving gives relief at 19%, while the charity's Gift Aid claim is at the UK basic rate of 20%, so Gift Aid is slightly cheaper for a starter-rate taxpayer.
- Adjusted net income. Both reduce it: Gift Aid by the grossed-up gift (ITA 2007 s.58), Payroll Giving because it comes out of your taxable earnings. So both help with the Personal Allowance taper and the High Income Child Benefit Charge (GOV.UK).
Related
Frequently asked questions
How does Payroll Giving work?
Your employer or pension provider takes the donation from your pay before Income Tax is worked out and sends it to an HMRC-approved Payroll Giving agency, which passes it to the charities you choose. You get Income Tax relief at your rate straight away through PAYE, with no claim to make. If your income is in the Personal Allowance taper zone, the extra relief from restored allowance comes through your tax code or Self Assessment instead. Your employer has to run a scheme for you to use it.
Is Payroll Giving taken before National Insurance?
No. GOV.UK says donations are taken from pay before tax but after National Insurance, so you still pay National Insurance on the amount you donate. The relief is Income Tax only.
What does a £10 a month Payroll Giving donation cost me?
It depends on your Income Tax rate. In 2026/27, outside Scotland, £10 costs a basic-rate taxpayer £8, a higher-rate taxpayer £6 and an additional-rate taxpayer £5.50. With income in the band where the Personal Allowance is tapered away above £100,000, it costs £4, because the donation also restores some allowance.
Can a charity claim Gift Aid on Payroll Giving donations?
No. GOV.UK says charities cannot claim Gift Aid on Payroll Giving donations. The donation already came out of your pay before Income Tax, so the tax relief has been given through your payslip instead.
Is Payroll Giving better than Gift Aid?
Outside Scotland the final cost to you is the same if the charity ends up with the same amount and you pay enough tax to cover the Gift Aid; the difference is that Payroll Giving gives all the relief immediately, while a higher or additional-rate Gift Aid donor has to claim the extra through Self Assessment or a tax code change. An agency fee taken from the donation reduces what the charity gets from Payroll Giving. A Scottish starter-rate taxpayer pays slightly less through Gift Aid, as long as they pay enough tax to cover what the charity reclaims.
Does Payroll Giving reduce my income for the Personal Allowance taper?
Yes. The donation is deducted in working out your taxable earnings from the job (ITEPA 2003 s.713), so it lowers your net income and therefore your adjusted net income, which is the figure used to taper the Personal Allowance above £100,000 and for the High Income Child Benefit Charge.