Do yourself a good deed on charity

Do you support a charity or any other good cause?

If your employer is offering payroll giving, you may like to join up.

Payroll giving allows you to give donations to an approved beneficiary organisation directly out of your pay. You will be able to claim a tax credit every payday, instead of waiting until the end of the tax year.

For a full list of the donee organisations approved by Inland Revenue Department (IRD), visit our website (www.ird.govt.nz/donee-organisations).

Payroll giving starts on January 7, 2010.

It is a voluntary scheme with employers allowed to offer it in the workplace. Employees can decide how the scheme will operate in their workplace.

For example, an employer may nominate one or more beneficiary organisations for their employees to support. They may also support any other organisation of your choice.

Please inform your employer of your willingness to participate in payroll giving, if available. They would need to know the name and bank account and contact details of the organisation, whether it is in the approved list, the amount of the donation, the pay periods involved.

The information required will depend on how the scheme has been set up.

If approved, the 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 33⅓ cents for each dollar donated. The tax credit will be deducted from your PAYE, and hence you will receive more money.

If you make donations outside of the 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) and attach the relevant receipts.

You cannot claim donations made through payroll by filling up IR 526.

Remember that you have already had the tax credits throughout the year.

For additional information, visit our website (www.ird.govt.nz) and enter ‘payroll giving,’ in the search function.

For additional information about donations and IR 526, type in ‘donations.’

Abdul Rafik is Inland Revenue’s Community Relationships Advisor based in Auckland. He is happy to answer readers’ queries, which should be sent to venkat@indiannewslink.co.nz