Does that include National Insurance? As you can’t claim back NI from Gift Aid, but you never pay it if you forego salary, the saving looks like it would be 12% on employee NI and 13.8% on employer NI (if I’m interpreting the taxes properly).
Wow, thanks. It was supposed to represent National Insurance, but it was based on a remembered figure. I think I must have worked out an average rate and assumed it was marginal at some point; perhaps this was also just on employee contributions.
Anyhow, I think that makes it 22.5% lost to taxes (so +29% on your donation) if you’re a basic rate taxpayer, and 13% lost (+15% on donation) if you’re a higher rate taxpayer.
Adding another mark in the “Look factual information up even when you think you know the answer” ledger.
Were I working for an EA org this would be the decisive factor that would swing me, so it would be really good if we could work this out.
Giving to another org adds Gift Aid to your donation. +20%
Forgoing salary saves you and your employer National Insurance. +29%
So if you’re basic rate, is giving to your employer better value?
In the UK I think it’s normally about 7% (assuming you’d get tax deductability / Gift Aid on another donation).
Does that include National Insurance? As you can’t claim back NI from Gift Aid, but you never pay it if you forego salary, the saving looks like it would be 12% on employee NI and 13.8% on employer NI (if I’m interpreting the taxes properly).
(source: https://www.gov.uk/national-insurance-rates-letters/contribution-rates)
Wow, thanks. It was supposed to represent National Insurance, but it was based on a remembered figure. I think I must have worked out an average rate and assumed it was marginal at some point; perhaps this was also just on employee contributions.
Anyhow, I think that makes it 22.5% lost to taxes (so +29% on your donation) if you’re a basic rate taxpayer, and 13% lost (+15% on donation) if you’re a higher rate taxpayer.
Adding another mark in the “Look factual information up even when you think you know the answer” ledger.
Were I working for an EA org this would be the decisive factor that would swing me, so it would be really good if we could work this out. Giving to another org adds Gift Aid to your donation. +20% Forgoing salary saves you and your employer National Insurance. +29%
So if you’re basic rate, is giving to your employer better value?