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Donors can claim credit on payday

Do you support a charity or other good cause?

If your employer offers payroll-giving, you may want to join the scheme.

Payroll-giving allows you to donate to an approved donee organisation directly from your pay. It also means that you will be able to claim a tax credit for your donations every payday, instead of waiting until the end of the tax year.

You can find a list of donee organisations at www.ird.govt.nz/donee-organisations.

Payroll-giving is a voluntary scheme launched in January 2010.

Since then, more than $7.3 million has been donated to people’s favourite charities and donee organisations.

Employers’ choice

Employers can decide how the scheme will operate in their workplace.

For example, some employers may nominate one or two donee organisations for their employees to support. However, you may be able to support any donee organisation of your choice, if it is on our approved donee list.

If payroll-giving is available at your company or workplace, please inform your employer of your choice.

They would usually need to know (a) the name of the donee organisation (b) the amount of the donation you wish to make (c) the pay periods involved and (d) the bank account number or postal address of the done organisation.

The information required will depend on how your employer’s scheme is set up.

Once you are in the scheme, your employer will deduct your donation from your salary or wage and pay it to the donee organisation.

You will be entitled to a tax credit of 33 cents for each dollar donated. For example, a donation of $15 will give you a tax credit of $5.

The tax credit will be deducted from your PAYE, and you will receive your tax credit in the same pay cycle that your donation is made.

Outside donations

If you make donations outside of a payroll giving scheme, you can claim a tax credit at the end of the tax year. You must file a Tax credit claim form (IR526) with Inland Revenue, attaching the relevant receipts.

You cannot claim donations made through payroll-giving in the IR 526 because you would have received the tax credits throughout the year.

Free Workshops

If you are in business, you may like to attend one of our free tax seminars or workshops held in various parts of the country. Please visit our website for details.

Abdul Rafik is Inland Revenue’s Community Relationships Advisor based in Auckland. He will answer your queries emailed to venkat@indiannewslink.co.nz

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