The number of people giving to charity through Give As You Earn has increased by 23 per cent since April 2000, reveals research.
The UK's largest scheme for tax-free payroll giving saw donations top £50m for 2001-02.
A survey by the Charities Aid Foundation examines the impact of radical changes made by the Government to payroll giving.
These include removing the £100 monthly ceiling and adding a 10 per cent bonus to all payroll donations until April 2003.
According to the survey, nearly half of high-level donors taking part in the scheme have joined since the changes were introduced - boosting the average annual donation among this group by 71 per cent to £2,396.
More than half of those donating state that the tax changes has made an impact on their giving. Nearly two-thirds of these had switched from other forms of tax-effective giving and almost a quarter of those previously donating up to the £100 monthly limit have increased their contributions still further.
Jenny Byers, CAF's executive director for donor services, called for an extension of the 10 per cent bonus on payroll giving.
"The dramatic growth brought about by the April 2000 changes can't be ignored. CAF is already working alongside other leading voluntary sector bodies to ensure we build on this success and finally begin to realise the incredible potential of payroll giving," she said.