Payroll giving calculator, 2026/27
For directors setting up a payroll giving scheme for staff, this calculator shows how a donation deducted before tax reduces take-home pay by less than the donation amount, because relief is given at the donor's marginal rate for 2026/27.
The payroll giving calculator runs on the rates and thresholds HMRC has published for the 2026/27 tax year, so the figures you see reflect the position your company is actually filing on rather than a historic set of bands. Change any input and the result recalculates immediately, with no sign-up and nothing sent anywhere.
If you are a director of a UK limited company, use it as a first look before a decision rather than as the decision itself. Payroll giving relief is given at the donor's marginal income tax rate for 2026/27 (20%, 40% or 45%), unlike Gift Aid which is relieved differently. Real company positions bring in other income, reliefs, group structures and prior year adjustments that a single page of inputs cannot see, which is why the workings are written out below under payroll, paye & employment. Read those, then check the numbers against your own accounts, and speak to us if anything looks materially different from what you expected.
Last reviewed 12 September 2026 for the 2026/27 tax year. Reviewed by Waqas Sagar, Member of ICAEW, Fellow of ACCA, Fellow of AAT.
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Result, 2026/27
Amount charity receives per year
Tax relief given automatically via payroll
Real cost to you per month
Effective relief rate
Based on your marginal income tax rateIllustration only, figures are based on the rates you have selected and the information entered. Please check your own position with us before acting.
Estimates for the 2026/27 tax year using published GOV.UK rates. Switch between 2026/27 and 2025/26 above.
How this is calculated
Payroll giving donations are deducted from gross salary before income tax is calculated, so the calculator compares tax due on the full salary against tax due once the annual donation is deducted, using the 2026/27 bands of 20% basic rate, 40% higher rate and 45% additional rate. The difference between the two tax figures is the relief the donor receives automatically, without needing to complete a Self Assessment claim.
Because relief is given at the marginal rate, a higher rate taxpayer effectively gets £40 of relief for every £100 donated, while a basic rate taxpayer gets £20, which is reflected in the effective relief rate shown above.
Payroll giving versus Gift Aid
Under Gift Aid, the charity claims basic rate relief directly from HMRC and higher or additional rate taxpayers must claim the extra relief themselves through Self Assessment. Under payroll giving, the full marginal rate relief happens automatically at the point of deduction, which is simpler for higher rate taxpayers and avoids the need for an annual tax return adjustment for this donation.
Employers must be registered with an HMRC-approved Payroll Giving Agency to operate the scheme, and the agency typically deducts a small administration fee before passing the donation to the chosen charity, which is a cost worth checking against Gift Aid for larger regular donations.
Setting this up as an employer
Offering payroll giving is straightforward through most payroll software once registered with an approved agency, and some employers choose to match employee donations as part of a wider corporate social responsibility programme, which is treated as a separate business expense rather than part of the payroll giving deduction itself.
What this means for your company
Treat the result as a planning figure for the 2026/27 tax year. If it changes what you were about to do, take a director's salary, a dividend, a large asset purchase or a filing decision, check it against your own accounts first. We can review the position with you and confirm the tax treatment before you commit.
Frequently asked questions
Does payroll giving reduce my National Insurance?
No. Payroll giving reduces the salary subject to income tax, but National Insurance is calculated on gross pay before the donation is deducted, so there is no NI saving from this type of giving.
Is payroll giving relief automatic?
Yes, relief is applied automatically through the payroll each pay period at the donor's marginal tax rate, with no need to claim anything separately on a Self Assessment return for these donations.
Can a company match employee payroll giving donations?
Yes, many employers choose to match donations as a separate contribution, which is usually treated as an allowable business expense for corporation tax purposes, subject to normal wholly and exclusively rules.
Is payroll giving better than Gift Aid for higher earners?
It can be, because higher and additional rate relief is given immediately through payroll rather than needing to be claimed back via Self Assessment, which simplifies things, though small agency fees may apply.
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