Nonprofits need payroll software to handle multiple tasks, like paying staff from different grants and managing multi-state tax regulations. The best payroll software ensures compliance, manages employee benefits, and streamlines operations, letting nonprofits focus more on their mission and less on administrative tasks.
However, choosing the right payroll for nonprofits can be tough with many options on the market. That’s why I’ve reviewed the top picks to help you select the best software for your needs.
The Best Nonprofit Payroll Software 2024
The Best Payroll Software for Nonprofits
- Rippling: Best for Automated Workflows
- ADP: Best for Growing Nonprofits Payroll and HR
- OnPay: Best for Transparent Pricing
- Deel: Best for Global Teams
- QuickBooks: Best for Seamless Integrations
- Patriot: Best for Affordability
- Gusto: Best for Small Nonprofit Organizations
- Paychex: Best for Tax Compliance
- Sage: Best for Integrated Payroll and Core HR Tasks
- OysterHR: Best for Employee Management
- Show Full Guide
The Best Payroll Software for Nonprofit Organizations Reviewed
I’ve tested each payroll software in detail, comparing their prices, features, and ease of use. For a comprehensive understanding of the testing process, you can find a full breakdown of Techopedia’s testing criteria further down in this article.
1. Rippling – Best for Automated Workflows
Free Trial | N/A |
---|---|
Starting Price | $8/user/month |
Countries Covered | 185+ |
Top Features | Recruiting, Time and Attendance, Benefits Administration |
Pros
- User-friendly interface
- Extensive app integrations
- No-code workflow automation
- Customizable pre-built reports
Cons
- Limited mobile payroll functionality
- Total cost can be pricey for small organizations
2. ADP – Best for Growing Nonprofits Payroll and HR
Free Trial | N/A |
---|---|
Starting Price | Custom |
Countries Covered | 140+ |
Top Features | HR Outsourcing, Compliance Support, Self-Service Portal |
Pros
- Supports multiple pay rates and jurisdictions
- Offers health insurance and retirement plans
- Provides access to legal services and employee assistance
- Automates payroll and tax filings
Cons
- Non-transparent pricing
- Additional costs for benefits administration
- No document management storage feature
3. OnPay – Best for Transparent Pricing
Free Trial | 30-day free trial |
---|---|
Starting Price | $40/month + $6/user/month |
Countries Covered | US only |
Top Features | Multi-State Payroll, Customizable Reporting, PTO Management |
Pros
- Transparent and straightforward pricing
- Customized payroll solutions
- Reliable tax reporting
- Seamless migration and setup process
Cons
- Limited international support
- Mobile app is iOS only
- Limited third-party integrations
4. Deel – Best for Global Teams
Free Trial | N/A |
---|---|
Starting Price | $29 per employee/month for payroll |
Countries Covered | 150+ |
Top Features | Contractor Management, Employer of Record, Equipment Management |
Pros
- Free HR tools for nonprofits with under 200 employees
- Accessible immigration
- Dedicated EOR service in over 150 countries
- Advanced reporting for hiring, headcount, and payroll
Cons
- No built-in time-tracking tools
- High cost with per-worker pricing
5. QuickBooks – Best for Seamless Integrations
Free Trial | 30-day free trial |
---|---|
Starting Price | $75/month +$6/employee/month (70% off for first 3 months) |
Countries Covered | 170+ |
Top Features | Tax Penalty Protection, QuickBooks Workforce, Tax Filing |
Pros
- Easy-to-use payroll dashboard
- Integrates with QuickBooks Online
- Next-day direct deposits
- Tax penalty protection
Cons
- High monthly base price
- Limited HR features
- Time tracking available for higher-tier plans
6. Patriot Software – Best for Affordability
Free Trial | First 6 months free |
---|---|
Starting Price | $17/month + $4 per employee (or 1099 contractor) |
Countries Covered | US only |
Top Features | Customizable Payroll, Time and Attendance Integration, Multi-Location Support |
Pros
- Affordable Pricing
- Easy to Use Interface
- Free Trial Available
- Guaranteed Tax Accuracy
Cons
- No Benefits Tracking
- Limited Mobile Access
- No International Pay
- Extra State Filing Fee
7. Gusto – Best for Small Nonprofit Organizations
Free Trial | 3 months free trial |
---|---|
Starting Price | $40/month + $6/user/month |
Countries Covered | 120+ |
Top Features | Global Hiring and Payroll, Performance Management, State Tax Registration |
Pros
- User-friendly interface
- Automated tax filing
- Dedicated HR support
- Contractor payroll
Cons
- Pricing scales with employees
- Limited reporting customization
- Slow customer support response
8. Paychex – Best for Tax Compliance
Free Trial | N/A |
---|---|
Starting Price | $39/month + $5 per employee |
Countries Covered | 140+ |
Top Features | Employee Benefits, Automated Tax Management, Donation Tracking |
Pros
- High-level customization
- Easy attendance and time tracking
- Supports multiple third-party integrations
Cons
- Pricing is not transparent for top-tier plans
- Additional fees for essential tools
9. Sage – Best for Integrated Payroll and Core HR Tasks
Free Trial | 60-day free trial |
---|---|
Starting Price | $12.80/month + $2.56/employee/month |
Countries Covered | 200+ |
Top Features | Automated Tax Management, Leave Management, Shift Scheduling |
Pros
- Budget-friendly
- Automated pensions and taxes
- Includes timesheets and scheduling
Cons
- Fewer integrations compared to other providers
- Time tracking is limited to Payroll Premium
- Non-intuitive interface and payroll process
10. OysterHR – Best for Employee Management
Free Trial | 30-day free trial |
---|---|
Starting Price | $29 per contractor/month |
Countries Covered | 180+ |
Top Features | Automated Payroll Management, Compliance, Employer of Record |
Pros
- Automated workflows
- Supports cross-border payment
- Integrated cost calculator
Cons
- No PEO options
- Limited reporting capabilities
- Expensive for small businesses
The Best Payroll Software for Nonprofits 2024 – Compared
Here’s an overview of the ten software reviewed.
Payroll Software | Best For | Free Trial | Starting Price | Countries Covered | Top Features | Time Tracking |
---|---|---|---|---|---|---|
Rippling | Automated Workflows | No | $8/user/month | 185+ | Recruiting, Time and Attendance, Benefits Administration | Yes |
ADP | Growing Nonprofits Payroll and HR | No | Custom | 140+ | HR Outsourcing, Compliance Support, Self-Service Portal | Yes |
OnPay | Transparent Pricing | 30-day free trial | $40/month + $6/person | US only | Multi-State Payroll, Customizable Reporting, PTO Management | No |
Deel | Global Teams | No | $29/employee/month | 150+ | Contractor Management, Employer of Record, Equipment Management | No |
QuickBooks | Seamless Integrations | 30-day free trial | $75/month +$6/employee/month (70% off for first 3 months) | 170+ | Tax Penalty Protection, QuickBooks Workforce, Tax Filing | Yes |
Patriot | Affordability | Yes, 6 months free | $17/month + $4 per employee (or 1099 contractor) | US only | Customizable Payroll, Time and Attendance Integration, Multi-Location Support | Yes |
Gusto | Small Nonprofit Organizations | 3 months free trial | $40/month + $6/person | 120+ | Global Hiring and Payroll, Performance Management, State Tax Registration | Yes |
Paychex | Tax Compliance | No | $39/month + $5 per employee | 140+ | Employee Benefits, Automated Tax Management, Donation Tracking | Yes |
Sage | Integrated Payroll and Core HR Tasks | 60-day free trial | $12.80/month + $2.56/employee/month | 200+ | Automated Tax Management, Leave Management, Shift Scheduling | Yes |
OysterHR | Employee Management | 30-day free trial | $29 per contractor/month | 180+ | Automated Payroll Management, Compliance, Employer of Record | Yes |
How We Review And Test Payroll Products
To provide our readers with accurate and well-informed recommendations, we test the most popular payroll products on the market to find the best options for you. Our methodology consists of the following criteria:
- Features: We examine the features to determine what capabilities are offered, how useful those capabilities will be for the user, and how the variety of features compare to competitor software.
- Scalability: We look at how many users can be added to a platform, and how easy it is to do so, to ensure companies can bring more employees on payroll with ease as they scale their operations.
- Error Handling: Errors in payroll can be disastrous for a company, so it’s critical payroll software safeguards against them. We evaluate how quickly each software can adjust and fix errors to ensure there are no interruptions in payroll operations.
- Price and Value for Money: We look at the features, integrations, customer service, and extras to determine if the price matches the value it provides. We score a product higher if it offers a free trial, and if it is transparent about its pricing plans.
- Integrations: We evaluate the integrations of each piece of software to determine how well it fits in with other key pieces in a business’s software stack, and whether its functionality can be expanded as required.
- User Experience: We get hands-on with each product to put ourselves in the shoes of a new user, testing each platform to gain understanding if the platform is easy to use or requires onboarding.
- Security: We dig into the security policies of each company, interrogating the safeguards they have in place to ensure the software protects user data properly.
- Compliance: We evaluate payroll software based on whether it offers local compliance when it comes to accounting, taxes, documentation, and more.
How Does Payroll for Nonprofits Work?
Nonprofit payroll operations share many similarities with those of for-profit businesses, but they also require specific considerations. Nonprofits must correctly classify workers as employees or independent contractors and determine appropriate wages within budget constraints and available funding.
Key payroll responsibilities include withholding and remitting payroll taxes such as state and federal income taxes, Social Security, Medicare (Federal Insurance Contributions Act (FICA) taxes), and unemployment taxes (FUTA and SUTA). While most nonprofits are tax-exempt organizations, they still must pay federal income taxes on any unrelated business income.
Complying with relevant federal and state regulations, including the Fair Labor Standards Act (FLSA), is also essential for nonprofits. Regularly filing payroll tax reports and issuing W-2 forms to employees are also necessary tasks that must be completed accurately and on time.
How to Pay Nonprofit Workers
When paying workers at a nonprofit organization, it’s important to follow specific guidelines to ensure federal and state law compliance. Here are some key points to keep in mind:
- Minimum Wage for Nonprofits: The federal minimum wage is $7.25 per hour, but some states have higher minimum wages. Nonprofits can pay employees with disabilities a lower rate with a certificate from the Department of Labor, and employees under 20 can be paid $4.25 per hour for the first 90 days of employment.
- Independent Contractors Working for Nonprofits: Nonprofits don’t have to withhold or pay payroll taxes on payments made to independent contractors. Independent contractors must complete a Form W-9 and will receive a Form 1099 at the end of the year for their earnings. However, nonprofits should be cautious when classifying workers as independent contractors, as the IRS may reclassify them as employees if certain criteria are not met.
- Volunteer Compensation: Volunteers donate their services without contemplation of pay. The amount must be nominal (insignificant and irregular) if a volunteer is paid. Payments over 20% of a full-time employee’s earnings for the same services are not considered nominal. Paying volunteers a regular or significant amount may result in them being classified as employees.
- Board Members of Nonprofit Organizations: When it comes to paying board members in nonprofits, the IRS doesn’t set a specific amount but requires payments to be fair. Compensation for board members, officers, and key employees should be decided by someone impartial. To ensure fairness, get approval from a qualified group, compare with similar roles, and document how decisions are made.
Labor Laws for Nonprofits
Nonprofits are typically exempt from certain labor laws governing volunteers, such as overtime rules and paid time off policies. However, it is important to understand and adhere to these regulations when establishing employee HR policies.
Here are some key labor laws to consider:
What’s the Best Free Nonprofit Payroll Software?
Although not completely free, I find that Gusto is the best free nonprofit payroll software because of its affordability, free payroll setup, global coverage, and nonprofit features. Depending on the promotional offer, Gusto offers discounts such as 25% off for the first 3 months. Also, I found that the interface is easy to learn, which makes it easy for nonprofits without a dedicated payroll manager to understand the system.
While using free payroll software may be cost-saving for nonprofits, the limitations that come with it can disrupt the smooth running of an organization. For instance, completely free payroll software like Payroll4Free can only handle limited payroll processes and won’t automate tax filing as with freemium tools like Gusto.
How to Choose the Best Payroll Software
When choosing your payroll platform, it’s essential to consider several key factors:
Determine your monthly payroll software budget (e.g., $100, $500, or $1,000) and prioritize platforms within this range. Decide which features are essential and which are nice-to-have extras that can be included in your budget.
Test the software’s user-friendliness in a demo to ensure your team can use it effectively. Look for beginner-friendly software that is easy to set up and can run payroll with just a few clicks. This saves on training costs and reduces the risk of payroll errors.
Check if the platform integrates with other software your organization uses, such as accounting, time tracking, and hiring tools. Some providers may limit certain integrations to higher-tier plans, so it’s important to verify compatibility.
Prioritize essential features such as auto-payroll, tax filing, expense and time off management, and benefits administration. Consider tools that support compliance, time tracking, and hiring processes.
Choose a platform that can grow with your organization. Look for options that offer multiple plans and add-ons to accommodate changes in your workforce. For instance, one-click time tracking can streamline timesheet approvals and reduce time theft as your team expands.
Evaluate the provider’s customer support options, including availability via chat, email, and phone. Read user reviews to gauge the quality and responsiveness of their support teams.
FAQs
Do nonprofits have to pay payroll taxes?
How does nonprofit payroll work?
What is the easiest payroll software to use?
Does Gusto have nonprofit pricing?
Does ADP work with nonprofits?
What percentage of a nonprofit budget should be payroll?
References
- What is FICA? (SSA.gov)
- Wages and the Fair Labor Standards Act (DOL.gov)
- State Minimum Wage Laws (DOL.gov)
- IRS Reminds Business Owners to Correctly Identify Workers as Employees or Independent Contractors (IRS.gov)
- Workplace Posters (DOL.gov)
- Family and Medical Leave Act (DOL.gov)