Payroll Giving

At SmoothPay we give very careful consideration to any changes required to payroll

We gave such consideration to Payroll Giving when it was mooted by IRD but expressed our concern at how easily it could be subverted and how it could disadvantage an employee.

Consequently, after no remedial action was taken by the architects of this well-intentioned but poorly implemented initiative we determined the safeguards around Payroll Giving to be deficient, so much so that we will not implement Payroll Giving into our product until such time as adequate safeguards are put in place.

Currently, the following aspects of Payroll Giving raise significant concerns:

  1. An employee may give you the wrong account number (it could even be an account number they own, having nothing to do with a charity)
  2. The fraud potential is significant (the amount deducted may be "redirected" or not paid to the charity)
  3. The tax rebate is final, meaning the employee could be disadvantaged by receiving a smaller rebate on their donation than they would receive had they claimed it at the end of the year

The solution:

  1. A web-service or onsite lookup should be available to validate any payroll giving selection
  2. A clearing house must be the only method of passing on payroll giving transactions from payroll (either by electronic web-service, or by onsite form filling or file import) with the total to be direct debited from the employer's nominated bank account

We are extremely concerned that Payroll Giving in it's present form is allowed to be operated in New Zealand. At time of writing there isn't even a list of bank account numbers for registered charities available for validation purposes (this would go some way to alleviating issues with using incorrect bank account numbers, but doesn't address the real issues around such a poorly designed and unsafe system).

Some employers may find this decision unreasonable, however we believe we are acting ethically and with the interests of both the employee and the charity at heart.


  • SmoothPay offers an alternative payroll product (cross-platform, multi-user and multi-country) called SmoothPay Gold, which provides for Payroll Giving (though we do not recommend using Payroll Giving in it's current form).
  • Other payrolls may offer Payroll Giving, however they are generally non-compliant with Holidays Act and Parental Leave requirements and often lack the integration features found in SmoothPay.
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