Payroll giving schemes, where employees donate to charities through their salaries, are in decline, latest research has revealed.

According to latest available data the amount donated to charities via such schemes fell by 7% from £137m in 2021 to £128 in 2022.

Over the last four years the number of employees using payroll giving has declined by 13% to 516,000 employees out of 30m people who are eligible to give through this form of donating.

Just one in 50 employees use salary sacrifice schemes for charity donations, according to the figures, which have been published by Charities Aid Foundation.

Lack of awareness is a barrier, according to CAF, which found that three in five people are not aware of the schemes. This shows the need “to increase knowledge and understanding among the general public” about payroll giving, it said.

A key group to target is 16–34-year-olds. More than a third of millennials in this age range say they would use a payroll giving scheme.

Another barrier to take up is affordability amid the cost-of-living crisis, warns CAF.

“It’s concerning that the number of employers and employees taking advantage of this valuable benefit is declining,” said CAF chief executive Neil Heslop.

“Payroll giving provides an incredibly powerful platform for companies to support their giving in the workplace and can be a lifeline for charities at a time when their incomes are squeezed.

“That’s why we would like to see a renewed and joined-up focus on promoting Payroll giving from providers, employers, and the government.

“For individuals who can afford to give, it’s a simple way to donate regularly or even on an ad-hoc basis to causes that matter to you.”

A CAF survey released last year found widespread confusion among staff around payroll giving. Two in five did not know if their employer runs a payroll giving scheme.

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