From tomorrow employees can receive an immediate tax break if they donate money to charities from their pay packet, provided their employers have signed up to the scheme.
Payroll giving allows employees to donate money directly from their pay packet to approved charities.
They will then get a tax credit directly each payday, rather than have to collect receipts and submit claims at the end of the tax year.
A Charities Commission spokeswoman said the immediate tax credit did not apply to one-off donations.
World Vision New Zealand acting chief executive Les Stephenson said this meant people making monthly donations of $40 under its child sponsorship scheme would receive tax credits on average of $13.20.
"This will definitely help people as they try to balance their monthly household budgets, especially in these tougher economic times," he said.
Mr Stephenson said he imagined many employers would embrace the scheme.
Payroll giving had been under investigation since late 2007 and was finalised last year.
NZPA