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Do Charities Need Payroll? A Guide for Non-Profits in the UK

If your charity has staff, you need payroll—even if you’re a small non-profit. PAYE, pensions, and HMRC rules apply the same way they do for any business.


Payroll guide for UK charities and non-profits – WorldWage Services

Here’s when you need payroll, what’s legally required, and how to manage it efficiently.


1. When Does a Charity Need Payroll?

Your charity must run payroll if you:

  • Pay any employee (even part-time or casual)

  • Pay trustees for specific work

  • Hire temporary staff under PAYE

  • Provide benefits in kind (e.g. housing, meals, cars)

Even if you're registered as a CIO or limited by guarantee, payroll laws still apply.


2. What If You Only Pay One Person?

You still need:

  • PAYE registration

  • RTI submissions

  • Payslips

  • Employer NICs (if earnings exceed thresholds)

This applies to:

  • Charity directors paid a salary

  • Admin staff

  • Paid fundraisers

  • Youth workers or outreach teams


3. Volunteers vs Paid Staff

Volunteers: No payroll required—if they receive no wages, benefits, or reimbursements that count as income.

Paid staff: Must go on payroll, even for short-term work or casual contracts.

Be careful: Reimbursed expenses must be genuine. If you pay flat-rate stipends, HMRC may treat it as taxable income.


4. Do Charities Need to Auto-Enrol Staff in Pensions?

Yes. If staff:

  • Are aged 22+

  • Earn over £192/week

  • Work under a contract

Then you must:

  • Enrol them in a workplace pension

  • Make contributions

  • File with The Pensions Regulator

You also need to reassess eligibility and declare compliance every 3 years.


5. Payroll Challenges for Charities

  • Funding often changes—payroll must be flexible

  • Grants might be restricted to certain projects/staff

  • Staff may be paid irregularly (event-based, project-based)

  • Trustees and volunteers may be confused about what’s allowed

Solution: Use a managed payroll provider who understands non-profits.


How WorldWage Helps Charities

We support charities with:

  • Fixed-fee monthly payroll

  • Full HMRC and PAYE compliance

  • Pension auto-enrolment setup

  • Support for part-time and flexible staff

  • Fast help with starter/leaver processing and RTI filing


Whether you pay one director or manage a funded team of 15, we make charity payroll simple.



 
 
 

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