The purpose of this Circular is to inform Australian Government employers and employees of the benefits of workplace giving programs and to give advice on how to implement these programs.
Australian Public Service (APS) agencies and employees support our communities through a broad range of charitable activities and programs. The Australian Government believes a strong, vibrant, independent and innovative Not-for-Profit sector is essential to underpin a productive and inclusive Australia. To this end, the Australian Government encourages agencies to support charities through the introduction and promotion of workplace giving programs.
Benefits of a workplace giving program
Workplace giving programs provide employees with the opportunity to regularly donate through their pay system to charities that are entitled to receive tax deductible donations. Employees are able to contribute to charities regularly and conveniently, without the need for an employee to keep receipts or to wait until the end of the year to claim tax deductions.
Charities benefit from workplace giving as it provides more consistent, regular and stable funding. There is a reduction of associated administrative cost for charities as they do not need to provide individuals with receipts and targeted communications.
Workplace giving is beneficial to employers as it provides an administratively simple, low cost way to promote partnership between agencies and the community. This can complement work based activities lending support to the community and a wide range of charitable organisations and events.
Implementing a workplace giving program
Agencies wishing to enter into a workplace giving program may choose to implement this program themselves. Most major payroll systems used by APS agencies can be used to support workplace giving programs. Alternatively, there are a number of companies which can provide this service on your agency’s behalf.
How to set up a workplace giving program
In setting up a workplace giving program, agencies may first choose one or several charities they want to participate in the workplace giving program. While agencies have discretion about how many and which charities they include in their workplace giving program, it is beneficial to consult with employees about which charities they would be interested in contributing to.
Agencies should also ensure that the charities they choose are eligible to receive donations through workplace giving programs. To be eligible, charities and other organisations must have a deductible gift recipient status (DGR). It is the responsibility of the agency to ensure that organisations receiving workplace giving funding have a DGR status. Information about whether an organisation has a DGR status is available from the ABN Lookup website.
Once your agency has decided on the charities, you can then approach and invite them to participate in the workplace giving program. Bank deposit details will need to be obtained from each charity involved in your program.
Agencies may also choose whether to reduce the amount of tax withheld from employees' salaries to account for the total amount donated by each employee each pay period. Information on how to calculate the amount of tax that should be withheld is available from the Australian Taxation Office (ATO) website.
It should be noted that:
- Your agency does not have to reduce the amount of tax you withhold from your employees' salaries—this is at agency discretion.
- Agencies should inform employees about whether or not participation in workplace giving will reduce the amount of tax withheld from their wages.
- Agencies should inform employees whether the donation is to a charity that is recognised as allowing for the employee to claim a tax deduction.
- Your agency has the right to decide on a minimum amount of donation per pay you are prepared to deduct from your employees' income. It should be noted that only amounts over $2 are tax deductible.
- Participation in an agency workplace giving program does not affect the way an employee’s superannuation guarantee payments or fringe benefits are calculated.
Once these issues have been determined agencies can invite employees to participate in the program and provide them with the details on how to donate.
You should obtain a receipt from the charities for any lump sum payments for your records.
It is also important to keep records of the amount donated on behalf of each employee.
Information about workplace giving is subject to privacy laws. For example, information about individual employees must not be passed on to charities or any other parties without the express written permission of each employee. Agencies, participating charities or any other parties shall take reasonable steps to ensure that information collected is protected against loss, unauthorised access, use, modification, disclosure and/or other misuse.
Promoting workplace giving in your agency
For a workplace giving program to be effective, it is important that employees know that it is available, understand how to use the program and are aware of the benefits of workplace giving. Agencies can promote workplace giving by incorporating information into normal communications with employees. For example, workplace giving could be promoted through Agency Head all staff emails, intranet pages, staff meetings and induction for new employees.
Agencies are encouraged to gather and store workplace giving statistics such as:
- the total number of staff participating in the program
- the number of participating charities
- the total amount donated to charities.
Keeping employees informed
Agencies may wish to consider sending a welcome email or letter to participating employees to acknowledge their participation in the program and confirm when the first amount of donation will be deducted. This could also be used to explain how their donation records will be communicated to them (for example, explaining how their donations will appear on their pay slips).
Agencies need to tell employees who donate through the agency workplace giving program the amount they have donated each year in writing. This information can be provided in a letter, by email or on their payment summary.
If your agency chooses to provide this information to employees in a letter or via email, the following must be provided:
- the agency name and ABN
- the employee's name
- the total amount donated for the year
- that the amount was donated to charities (you may wish to break this down to show amounts donated each charity)
- the financial year in which the donation was made.
If you choose to provide this information by payment summary, the total amount of donations an employee made under a workplace giving program is shown in the deductions section. There is no need to list each organisation, just show 'Workplace giving' and the total donations for the year.
Should you require further information or assistance on this matter, please contact the Conditions Policy team on (02) 6202 3949 or via workplacerelations [at] apsc.gov.au.
Workplace Relations Group
11 June 2013