PAYROLL GIVING

The New Zealand Inland Revenue Department (IRD) has introduced a new voluntary payroll giving scheme which makes it easier for employees to help their favourite not-for-profit organisations.

The scheme allows employees to make donations to The Neonatal Trust and other charitable organisations automatically from their pay. It’s a great alternative to giving, retaining a receipt and claiming a tax credit at the end of the year.

The payment will be forwarded to The Neonatal Trust by the donor’s employer, and the donor will receive immediate tax benefits, shown in their normal pay, based on the amount of their donation.

For example, if you make a $10 donation to The Neonatal Trust every week you will receive a tax credit of $3.33. Donations will go to help The Neonatal Trust provide the best start for every Kiwi child throughout the country.

To support The Neonatal Trust talk to your employer and ask them to set up the scheme.

Payroll giving and employees

If your employer offers a payroll giving scheme and you want to join, you need to:
Check the donee organisation you wish to donate to is on the approved donee list.
Give your employer the:

• name of the donee organisation
• amount of the donation you want to make
• pay period, or periods, you want the donation to be made
• the donee organisation's bank account or postal address.

If your employer’s scheme allows, you can alter the frequency, amount and donee organisations you choose to donate to.

How tax credits for payroll donations work

Tax credits for payroll donations are calculated at 33.33 cents for each dollar donated which is deducted from you PAYE.
Employers are responsible for calculating the correct tax credits for each payroll donation made by their employees.
The tax credit for payroll donations is 33.3333 cents for each dollar donated. Once the tax credit has been calculated, the employee’s PAYE is reduced by the amount of the tax credit.
For more information on payroll giving visit the IRD website.