Looking for a simple way to support causes that matter to you while also getting a tax benefit? Many Australian employers offer workplace giving programs, which provide a hassle-free way to regularly donate to charities that are deductible gift recipients (DGRs).

What’s Workplace Giving?

Workplace giving is a straightforward arrangement where you make regular donations to eligible charities directly from your after-tax pay. Your employer deducts the nominated amount from your pay each payday and forwards it to the charity (or charities) of your choice. Importantly, this doesn’t affect your gross salary, superannuation guarantee payments, or fringe benefits calculations.

The full annual donation amount will be listed on your income statement, and you can claim it as a deduction when you lodge your tax return. It’s important to note that workplace giving is different from salary sacrifice arrangements. With salary sacrifice, donations come from your pre-tax pay, which reduces your gross salary and may affect your super and other benefits. In this case, your employer claims the tax deduction, not you.

Benefits for You

• Immediate Tax Savings: By participating in workplace giving, your employer can reduce the tax withheld from your pay to account for your donations. This gives you an immediate tax benefit. For example, if you earn $65,000 annually and donate $15 per fortnight, your tax could be reduced by approximately $4 every fortnight (or $104 per year). Remember, you still need to claim the total amount of your donation in your tax return to account for the tax benefit you’ve already received.
• Simplified Record-Keeping: Your employer will include the total amount donated on your income statement at the end of the financial year. This means you won’t need to collect receipts or confirmation emails for each donation.
• Regular, Manageable Giving: Setting up small, regular donations is often more sustainable than making larger, one-off contributions. There’s no minimum or maximum contribution required by law, so you can start with an amount that fits your budget.

Benefits for Charities

Charities appreciate workplace giving programs for several reasons, including:

• Reliable, Regular Income: Charities can rely on the consistent donations they receive through workplace giving.
• Reduced Fundraising and Administration Costs: With regular donations coming in, charities spend less on fundraising and admin.
• Stronger Connections with Corporate Supporters: Workplace giving also strengthens the relationship between companies, their employees, and the charities they support.

Getting Started

If your employer offers a workplace giving program, they should provide:

• A list of participating DGR charities.
• Information about the minimum donation amounts for the program (if any).
• Details about how they’ll adjust your tax withholding based on your donations.

To verify whether a charity has DGR status (meaning your donations are tax-deductible), visit the ABN Lookup website and search for the charity’s name.

Remember, workplace giving doesn’t affect your gross income or superannuation guarantee payments. It’s simply a streamlined way to support the causes you care about while making the most of your tax efficiency.