Payroll Giving enables employees to make regular donations to charity directly from their pay. The employee will receive an immediate tax credit on the donated amount, which will reduce the amount of PAYE tax deducted from the pay.
For more information about the Payroll Giving scheme, refer to the IRD website.
1) Create a new pay code for each donee organisation, including the bank account details. The pay code tax type must be Payroll Donation.
2) Add the pay code to the employee's default paycodes.
3) The next time a pay is created for an employee, the new pay code will be included and the tax credit pay code will be automatically added to the pay.
4) The Online Banking Extract report will include transactions for the donations to the donee organistaion's bank account
5) The monthly EMS report will include new totals for
A donee organisation is charity or organisation who is able to receive donations from an employee's pay.
A donee organisation must have Inland Revenue donee status. Anyone on the IRD approved list is eligible to receive payroll giving donations.
For more information, refer to the IRD website.
Payroll Giving Tax Credit
Tax credits for payroll donations are calculated when a donation is made using payroll giving and gives immediate tax relief as a reduction in the employee's PAYE.
The amount of the tax credit for payroll donations is 33.33 cents for each dollar donation.