Payroll Giving in India: A Guide to Employee Giving Programmes

Payroll giving lets employees donate a small amount to charity directly from their monthly salary. It is simple for staff, steady for charities and, when a company adds matching contributions, a strong way to build a culture of giving at work.

In India, payroll giving is still less common than one-off donation drives during festivals or disasters. Yet many companies already have the systems to run it well. This guide explains how payroll giving works in India, how companies can set up an employee giving programme, what employees should know about tax, and how to choose a trustworthy charity partner.

What is payroll giving?

In a payroll giving programme, an employee chooses a charity and a monthly amount. The employer deducts that amount from the employee’s salary and passes it to the charity, either directly or through a giving platform. The employee can usually start, change or stop the donation at any time.

Common features include:

• Fixed monthly donations, often small amounts that add up over a year.
• A choice of charities, usually a shortlist vetted by the company.
• Matching gifts, where the company adds a contribution for every rupee employees give.
• One-day salary pledges, where staff donate a day’s pay once a year.

Why payroll giving works

For charities

Regular monthly income is more valuable than a single large gift, because it lets charities plan staff, training batches and programme costs with confidence.

For employees

Small monthly amounts feel manageable, giving is automatic, and staff can support causes they care about without extra paperwork.

For companies

Employee giving strengthens engagement and pride, gives staff a voice in social impact, and complements the company’s CSR work.

Payroll giving and CSR: know the difference

Under Section 135 of the Companies Act, 2013, qualifying companies must spend on CSR activities listed in Schedule VII. Employee payroll donations are the employees’ own money, so they are not the company’s CSR spend. A company’s matching contribution is different: whether it can be counted as CSR depends on how it is structured, the activity, the implementing agency and the CSR rules. CSR and finance teams should confirm this with their advisers before launch.

What both have in common is the need for a credible partner. Charities working with CSR funds should hold CSR-1 registration on the MCA portal, along with proper tax registrations and audited accounts.

Tax on payroll donations: what employees should know

Donations to eligible charitable organisations have long qualified for a deduction under Section 80G of the Income-tax Act, 1961. From tax year 2026-27, the Income-tax Act, 2025 has replaced the 1961 Act and the donation deduction moved to a new section, though it is still commonly called “80G”. Key points:

• The deduction is generally available only under the old tax regime, not the default new regime.
• Employees need a valid donation receipt and certificate from the charity with its registration details.
• Some employers reflect eligible payroll donations in salary TDS calculations; others ask employees to claim them in their own return.

Rules and limits change, so employees should check current rules with a tax adviser or the Income Tax Department before claiming.

How to set up an employee giving programme: 7 steps

1. Get leadership support. A visible commitment from senior leaders, ideally with a matching budget, sets the tone.
2. Choose two to five charity partners. Too many choices confuse staff; too few limit engagement.
3. Do due diligence. Check registrations, audited financials, programme reports and governance (see the checklist below).
4. Set up the process with payroll and finance: consent forms, deduction rules, transfer schedule and receipts.
5. Launch with stories. Invite charities to share real outcomes in a town hall or video session.
6. Report back regularly. Share totals, matching amounts and updates from partner charities every quarter.
7. Add volunteering. Skill-based volunteering, such as mentoring or mock interviews, deepens the connection.

Checklist: choosing a payroll giving charity partner

• Registered trust, society or Section 8 company, with a trust deed or equivalent
• Valid 12A and 80G registrations, and CSR-1 if matching CSR funds are involved
• Audited financial statements for recent years
• Clear, measurable outcomes, such as students trained or placed
• Transparent use of funds and regular reporting
• A named contact who can answer staff questions quickly

Why fund women’s media education through payroll giving

Skills training is a natural fit for monthly giving, because a student’s journey runs over months, not days. Puppets Picture Education Trust (PPET) in Noida runs the 12-month Karuna Media Master Program (KMMP), training women from low-income families in filmmaking, video editing, audio, AI content creation and digital media, with placement support. The program is funded by donors and CSR partners.

On our donate page, PPET lists its trust deed, 12A, 80G, CSR-1 and ISO registrations, along with downloadable audited financial statements, and states that donations are eligible for 80G receipts. Our impact page shares annual reports and student outcomes, and CSR partners receive quarterly impact reports.

If your company is planning an employee giving programme, or you want to give monthly yourself, please explore ways to donate and partner with PPET. You can also learn more about PPET and its governance.

Payroll giving FAQs

Can employees choose their own charity?

Most programmes offer a shortlist of vetted partners so that due diligence and receipts are handled properly. Some companies also allow staff to nominate a registered charity, subject to the same checks.

What is a sensible monthly amount?

There is no fixed rule. Many programmes suggest a small, comfortable amount so that staff keep giving month after month. Consistency matters more to charities than size.

Can employees stop or change their donation?

They should be able to. A good programme lets staff pause, change or cancel their donation easily, usually from the next payroll cycle.

Small amounts, steady change

Payroll giving turns good intentions into a habit. A modest monthly amount from many colleagues can fund training that changes a family’s income for years. Start with one partner, one matching rule and one quarterly update, and let the programme grow.