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Payroll Giving

Donations to Rhema Media qualify for a tax rebate, however you have to wait till the end of the tax year. There is a better way - payroll giving. You can make regular donations and get an immediate tax benefit. Every payday an amount can be directed to a charity of your choice - like Rhema Media - so whatever you give goes straight to your charity and the tax rebate is immediate.

Below is some further information on payroll giving. You can find this information, and more, at:

• The IRD website

• Downloading the IRD booklet, IR617 (pdf)

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.

Example

If someone normally pays $150 PAYE tax then the tax credit for the payroll donation amount is deducted from this, thus reducing the amount of PAYE paid:
Gross PAYE $150.00
Donation $10.00
Tax credit for payroll donations $3.33 ($10.00 x 33.33)
Net PAYE $146.67
Note: An individual's tax credits for payroll donations can't exceed their tax for that period.

If you as an employee want to join the payroll giving scheme, you need to provide your employer with the following information:

• Name of the donee organisation
• Amount of the donation they want to make
• Pay period, or periods, they want the donation to be made, and
• Donee organisation's bank account details, and/or postal address.  If your scheme allows, the frequency, amount and donee organisations chosen by employees can change at the employee's discretion.

It would be wise for the employee to also let the donee organisation know the amount, frequency and start date to ensure that the employer is passing on the donation to the donee organisation.

Other Points to Note:

• This is not available to everyone: Some small employers may not file their payroll files electronically. In this case, payroll giving is not available to their employees.
• Payment deadlines: Donations have to be passed to the donee organisation by the employer on or before the PAYE due date which is closest to the end of the two months from the last day of the pay period that the donation was deducted.
• Receipts: Any receipts that the employer receives from donee organisations for donations made under the payroll giving scheme must be retained for their records. They should not be included as business or individual donation receipts for tax purposes. Receipts from the done organization need to be clearly marked “Payroll Giving”.

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