Some interesting discussion at taking a pay cut when working in something directly here.
I think you are mistaken on how Gift Aid / payroll giving works in the UK (your footnote 4), it only has an effect once you are a higher rate or additional rate taxpayer. I wrote some examples up here. As a basic rate taxpayer you don’t get any benefit—only the charity does.
My impression is that people within EA already defer too much in their donation choices and so should be spending more time thinking about how and where to give, what is being missed by Givewell/OP etc. Or defer some (large) proportion of their giving to EA causes but still have a small amount for personal choices.
I think you are mistaken on how Gift Aid / payroll giving works in the UK (your footnote 4), it only has an effect once you are a higher rate or additional rate taxpayer. I wrote some examples up here. As a basic rate taxpayer you don’t get any benefit—only the charity does.
Thanks for the link to your post! I’m a bit confused about where I’m mistaken. I wanted to claim that:
(ignoring payroll giving or claiming money back from HMRC, as you discuss in yoir post) taking a salary cut (while at the 40% marginal tax rate) is more efficient (at getting money to your employer) than receiving taxed income than donating it (with gift aid) to your employer
Is this right?
My impression is that people within EA already defer too much in their donation choices and so should be spending more time thinking about how and where to give, what is being missed by Givewell/OP etc. Or defer some (large) proportion of their giving to EA causes but still have a small amount for personal choices.
Fair point. I think that because I’m somewhat more excited about one person doing a 100 hour investigation rather than 10 people doing 10 hour investigations and I would still push for people to enter small-medium sized a donor lotteries (which is arguably a form of deferral).
Some interesting discussion at taking a pay cut when working in something directly here.
I think you are mistaken on how Gift Aid / payroll giving works in the UK (your footnote 4), it only has an effect once you are a higher rate or additional rate taxpayer. I wrote some examples up here. As a basic rate taxpayer you don’t get any benefit—only the charity does.
My impression is that people within EA already defer too much in their donation choices and so should be spending more time thinking about how and where to give, what is being missed by Givewell/OP etc. Or defer some (large) proportion of their giving to EA causes but still have a small amount for personal choices.
Thanks for the link to your post! I’m a bit confused about where I’m mistaken. I wanted to claim that:
(ignoring payroll giving or claiming money back from HMRC, as you discuss in yoir post) taking a salary cut (while at the 40% marginal tax rate) is more efficient (at getting money to your employer) than receiving taxed income than donating it (with gift aid) to your employer
Is this right?
Fair point. I think that because I’m somewhat more excited about one person doing a 100 hour investigation rather than 10 people doing 10 hour investigations and I would still push for people to enter small-medium sized a donor lotteries (which is arguably a form of deferral).
Ah gotcha, re: the pay cut thing then yes 100%, not least because employers also pay national insurance of 13.8%!
So your employer is paying 13.8%, then you are paying 40% income tax, and 2% employee national insurance.
And gift aid / payroll giving is pretty good, but not that good!