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 Case Studies
Charities Aid Foundation - Advocacy Involvement
| Issue |
Pre-tax Payroll Giving |
| Background |
- New Incentive for donations to charities registered as Deductible Gift Recipients (DGR) in Australia.
- Announcement by the Australian Taxation Office in July 2002.
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| Press Release Extract |
- In a ground-breaking move the Australian Tax Office has announced a variation to withholding tax for donors making ongoing/recurring donations to charities with deductible gift recipient status from their pay (through Gazette S 251).
- Under the new ruling employees, whose employers endorse the variation, can receive an immediate tax benefit thanks to reduced tax being withheld from their pay.
- This means that an employee who pays marginal tax of 42% and donates $20 from their pay will only see $11.60 deducted due to the reduced amount of tax the employer is required to withhold.
- In Australia a few million dollars is being gifted annually through payroll giving programs. The positive tax changes now present a new opportunity for such donations to at least double over the next two years.
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| CAF's Role |
- Charities Aid Foundation (CAF) Australia lobbied for this change along with others over a period of more than two years.
- Work included the writing of a paper presented to the Prime Minister's Community Business Partnership tax committee and writing directly to the Australian Taxation Office.
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