Workplace giving: How it works for Australian employees

Workplace giving lets Australian employees donate to a charity like The Fred Hollows Foundation straight from their pre-tax salary through their employer's payroll system. Because the deduction happens before tax is calculated, you get the tax benefit immediately each pay cycle, with no receipts or end-of-year tax claims required. Some employers also match employee donations dollar for dollar, doubling the impact. Speak to your HR or payroll team to see if your workplace already runs a giving program with The Foundation. 

Workplace giving provides a hassle-free, tax-effective way of supporting registered and important Australian charities, such as The Fred Hollows Foundation. But what is workplace giving and how does it differ from providing separate, independent support? 

When you participate in a workplace giving program, your donation is taken straight out of your pre-tax salary through your payroll system and before you are paid. Your chosen sum is deducted automatically during each pay cycle which allows you to benefit from the Australian Taxation Office’s (ATO) endorsed tax deductibility immediately. Instead of having to keep receipts and make a claim at tax time, you enjoy reduced tax through your employer’s payroll system during each cycle. 

Does your employer run a workplace giving program? Speak to your Human Resources representative about joining The Fred Hollows Foundation's Workplace Giving program.  

What Does Workplace Giving Mean? 

Workplace giving refers to the automatic donating to a charity of your choice through a formal arrangement with your employer. This is instead of you supporting The Foundation, or another charity, yourself. 

Sometimes, workplace giving is called payroll giving. But the process is the same: Regular, automatic support for your charity implemented by your employer. 

There are some core features and differences that make workplace giving so beneficial. 

• Your support is deducted from your pre-tax salary, not your take-home pay. 

• Your employer sends the money to your chosen charity during each pay cycle.

• You benefit from a lower taxable income immediately. 

• You do not have to record and provide all your tax receipts for your donations during your tax return. 

What is a matching gift program? 

Some employers also offer a matching gift program as part of their workplace giving. 

In these programs, your employer will match your charitable support dollar for dollar, essentially doubling any contribution your and your workmates make. 

It is a highly effective way to promote generosity in the workplace and an effective way for worthy charities, like The Foundation, to receive twice the amount of support for its global work. 

How Does Pre-Tax Payroll Deduction Work? 

As with regular giving to a registered charity, the amount you donate through workplace giving is tax deductible. 

However, the deduction from your pre-tax salary occurs before you receive your pay, rather than retroactively claimed when you make a solo, individual contribution.  

How does it work?

1. Set your workplace giving amount 

First you nominate a fixed amount to give through your employer’s workplace giving program each pay cycle. Let’s say it’s $50 every fortnightly pay cycle, which is $100 a month. 

2. Donation is deducted from your salary  

Your workplace’s payroll system will deduct your chosen amount, $50, from your fortnightly gross salary. It will be deducted before the tax you owe for that pay cycle is calculated. 

3. Pre-tax deduction lowers tax withheld  

The tax you then owe is lower than it otherwise would have been because the ATO considers your taxable income to be lower by the amount you donate. In other words, if your take home pay for the fortnight is $2,000 then the taxable income will be $1,950. 

4. You receive your after-tax salary 

Your chosen charity receives your nominated donation and you receive your net pay less the after-tax cost of the donation.  

How Is Workplace Giving Taxed for Employees? 

The tax deduction occurs before tax is applied to your pay. Therefore, the ATO treats the tax benefit as already provided. You do not need to keep receipts for your charitable contributions for lodgement during tax time. 

• Your employer's income statement will include a summary of your pay, including all your workplace giving contributions 

• You do not claim a separate deduction for these donations in your tax return. 

• Workplace giving is separate and different from salary sacrifice arrangements. 

If you have questions about your specific workplace giving arrangement, please reach out to your payroll team. 

How Do You Set Up Workplace Giving? 

If your workplace offers a giving program already, simply speak to your payroll representative about choosing The Fred Hollows Foundation as your chosen charity. 

However, if your employer doesn't currently offer a workplace giving program, you can get one started.  

• Speak with HR or payroll first to find out if there is already a program in place you are not aware of. 

• Raise it with your HR or People & Culture team, and explain the minimal costs but many benefits of workplace giving. 

• Share our guide on setting up workplace giving with The Foundation. 

• Start small and, if successful, build up over time 

• Ask whether matched giving could be part of the offer as it effectively doubles the impact of every employee donation. 

Remember: If your employer isn't able to set up a program right now, you can still support The Foundation by making a regular donation. 

Frequently Asked Questions About ATO-recognised Workplace Giving 

What is the meaning of workplace giving?  

Workplace giving refers to the arrangement of a pre-tax payroll-implemented donation. Instead of you donating to a charity of your choice, your employer simply deducts the chosen amount from your gross salary each pay cycle. 

Is workplace giving tax deductible?  

Yes, however the tax benefit occurs automatically through your employer withholding additional tax. In other words, you don't have to claim a separate deduction in your tax return.  

Is workplace giving and salary sacrifice the same thing?  

Workplace giving and salary sacrifice are separate arrangements, but both recognised by the ATO. Speak with your payroll team to understand which arrangement is offered by your employer. 

Does my employer match my donation?  

Not necessarily. A matching gift program is optional and your employer will decide whether this is an offering that provides and adds to their giving program. 

Can I change or cancel my workplace giving amount?  

Yes, you can. You can increase, decrease or cancel your support at any time by speaking to your payroll or HR team. 

Do I need to keep receipts for workplace giving?  

No, you do not. The deduction happens before tax is taken from your payslip, so you don't need individual receipts. Your employer's payment summary will be your record of donations for the financial year. 

Do businesses claim a tax deduction for workplace giving too?  

Yes, they do. The rules and regulations do differ for employers. If you work in HR or payroll, we recommend you visit our guide to workplace and corporate giving tax deductions in Australia to understand the employer side of workplace giving. 

Ready to support The Foundation? 

When you support The Fred Hollows Foundation with your workplace giving, you’re helping us work to end avoidable blindness across the world. And with 75% of all donated funds going directly to eye health programs and advocacy, you can enjoy peace of mind that your generosity is really making a difference. 

Explore workplace giving today.