Best Payroll Software for Nonprofits in 2023
This article is part of a larger series on Payroll Services.
As a nonprofit organization, finding a payroll software can sometimes be challenging. While on the hunt for the best fit, look for a provider that has the features you’ll need, such as tax filing and quick payment options, is budget-friendly, and understands your needs as a nonprofit. In this guide, we highlight five different payroll software that can streamline your payroll process so you can focus on what you do best without breaking the bank.
Based on our evaluation, the best payroll software for nonprofits are:
- Gusto: Best overall payroll software for nonprofit organizations, especially those with fewer than 100 employees looking for both payroll and human resources (HR) support
- QuickBooks Payroll: Best for QuickBooks accounting users
- Paycor: Best for a robust HR solution
- Patriot Payroll: Best for small nonprofits that need a simple payroll solution
- ADP Run: Best for scalable payroll software to grow with
If you need more information before choosing a provider, check out our easy guide to understanding payroll for nonprofits, where we walk you through everything from unemployment taxes to labor laws.
Payroll Software for Nonprofits Compared
Providers | Starter Monthly Pricing | Specific Non Profit Features | Unlimited Pay Runs | Calculates and Files Payroll Taxes | Standard Direct Deposit Timelines | Health Benefits | HR tools |
---|---|---|---|---|---|---|---|
$40 + $6 per employee | Charitable Giving, Aplos integration | ✓ | ✓ | 2 days | 39 states | Hiring and onboarding | |
$45 + $5 per employee | QuickBooks Accounting for Nonprofits | ✓ | ✓ | Next-day (Same-day available) | 48 states | ✕ | |
$99 + $5 per employee | Experience and Blackbaud integration | ✕ | ✓ | 2 days | ✓ | Higher plans include HR tools and support | |
$17 + $4 per employee | Experience with churches and small nonprofits | ✓ | ✓ | 4 days (can request 2 days) | ✕ | Add-on for organization, documents, and HR reports | |
$65 + $3 per employee** | Specialized plans for nonprofits | ✕ | Costs extra | 2 days | ✓ | Higher plans include HR tools and support | |
*Some offer discounts for annual subscriptions.
**Based on a quote; call for custom pricing.
Looking for something more robust?
If you need a solution that will handle not only payroll but all your HR functions, consider Justworks. This is a professional employer organization (PEO), which means it treats your employees as its own for administrative purposes. Justworks can cover everything from hiring to retiring, handles payroll in multiple states, including assuming liability for taxes, and generally takes HR worries off your hands. It’s No. 1 on our list of best PEOs for small businesses and, at $59 per employee monthly, is an affordable option. Learn more in our Justworks review.
Gusto: Best Overall Payroll Software for Nonprofits
What We Like
- Unlimited payroll runs
- Customizable reporting
- Affordable plans with a contractor-only option
- Gusto Giving lets employees donate from their paycheck
What's Missing
- No pricing discounts for nonprofits
- Insurance is only available in 39 states
Gusto Pricing
- Simple Plan: $40 plus $6 per person monthly
- Plus Plan: $80 plus $12 per person monthly
- Contractor only: $6 per person monthly (no base fee)
- Priority support and HR add-on: $8 per person monthly
- No nonprofit discount
Gusto’s excellent tools earned it first place in our guides to the best small business payroll software and the best payroll services, and it’s featured in multiple payroll and HR software lists. Its price point, ease of use, and integration with Aplos nonprofit management software earn it the top spot on this list as well. Its contractor-only plan, which is the cheapest on our list, is a great option if you only work with contract employees. Gusto offers excellent tools for employees too, including Gusto Wallet, which makes it easy to budget, save, and even give to charities.
In our evaluation, Gusto earned an overall score of 4.37 out of 5. While Gusto doesn’t currently offer health insurance in all 50 states like ADP Run and Paycor do, it’s inexpensive, easy to use, and highly regarded by users. It earned top scores for popularity and reporting and high scores in general.
Gusto Pricing
Since our last update, Gusto has changed its plan structure and pricing. The prices are a little higher, but there are additional tools. Gusto does not offer a discount for nonprofits:
- Simple ($40 plus $6 per employee monthly): Includes unlimited pay runs, automated payroll taxes, paid time off (PTO) policies, an employee self-service portal, onboarding tools, benefits administration, new hire reporting, and two-day direct deposit
- Plus ($80 plus $12 per employee monthly): Includes Simple Plan plus multistate payroll, time tracking, project tracking, expense tracking, and workforce costing, along with hiring tools, an applicant tracking system (ATS), organizational chart, and next-day direct deposit
- Get access to HR experts and resources plus direct support for an additional $8 per employee monthly
- Premium (call for quote): Includes all Plus features plus surveys, performance reviews, compliance alerts, access to Gusto’s HR resource center, contact with certified HR professionalism and next-day direct deposit
- Contractor Only ($6 per employee monthly): Unlimited contractor payments, contractor self-service portal, 1099 filings, and new hire reporting; international contractor payments cost extra and comes with four-day direct deposit
Users love Gusto’s easy interface.
(Source: Gusto)
Gusto Features
- Nonprofit features: Gusto makes it easy to set your Federal Unemployment Tax Act (FUTA) exemption (others do this as well). It also integrates with Aplos, a highly rated software specifically for managing nonprofits and donations. Gusto also has Gusto Giving, which lets employees make donations straight from their paycheck and allows you to match contributions if you wish. Gusto reports these contributions automatically in Box 14 of the IRS Form W-2. We did not find a similar tool in the other software on our list.
- Flexible payroll: Gusto allows unlimited pay runs, so you can set the pay schedules for what’s best for each type of worker; for example, part-time workers can be paid weekly while salary workers are paid bimonthly. Gusto’s Simple plan allows you to process direct deposit payments in two days while higher tiers offer access to next-day direct deposits. This means you will only have to process payroll one day in advance, a huge benefit for busy nonprofits that need to keep their cash on hand longer. QuickBooks Payroll offers next-day direct deposit in all of its plans and same-day direct deposit in premium ones.
- Employee benefits: Gusto can broker with 30 carriers for more than 9,000 benefit plans, including health insurance, 401(k)s, FSAs, commuter benefits, and more. If you already have plans, Gusto Premium can integrate with them. However, Gusto only offers health benefits in 39 states. For the full list of states where Gusto can offer benefits, check out its frequently asked questions (FAQs). ADP Run and Paycor cover all 50 states; QuickBooks Payroll covers 48.
- Financial benefits: Gusto also offers great financial wellness tools. Employees can split paychecks among multiple accounts, create budgets, create savings goals, and more through the Gusto Wallet app. Gusto Wallet also comes with a debit card and allows employees to get their pay up to two days early.
- Free payroll setup: Similar to Patriot, Gusto offers a free system setup. Its team will request all relevant information and get everything up and running for you. If you prefer to do it yourself (DIY), you can utilize its payroll startup wizard.
- Third-party software integrations: Gusto’s software integration options include FreshBooks, Xero, QuickBooks, When I Work, Homebase, and Expensify. This flexibility is a huge plus for Gusto. Patriot, for example, only integrates with its own accounting software and QuickBooks.
QuickBooks Payroll: Best for QuickBooks Accounting Users
What We Like
- Direct integration with QuickBooks Accounting
- Next- and same-day direct deposit
- Tax penalty protection that covers users’ errors up to $25,000 with Elite plan
What's Missing
- Tax penalty protection only in Elite plan
- Does not automate local taxes
- Inconsistent customer support
QuickBooks Payroll Pricing
Payroll Only:
- Core: $45 plus $5 per employee monthly
- Premium: $75 plus $8 per employee monthly
- Elite: $125 plus $10 per employee monthly
Bundle Payroll and QuickBooks Accounting:
- Core plus QuickBooks Simple Start: $75 plus $5 per employee monthly
- Premium plus QuickBooks Essentials: $100 plus $5 per employee monthly
- Elite plus QuickBooks Plus: $160 plus $8 per employee monthly
QuickBooks Payroll offers many of the most important pay processing tools that a nonprofit organization needs at a reasonable price. Given that its payroll function can be directly and easily accessed through the QuickBooks system, it saves QuickBooks users time from having to separately set up a chart of accounts and import pay-related data into its platform. With QuickBooks being a household name for accounting software, this is a huge competitive advantage, especially compared to those with very limited integration capabilities such as Patriot Payroll.
With 4.23 out of 5 in our evaluation, QuickBooks Payroll earned high ratings for pricing, payment features, and reporting. It lost points for not having a pay card option or nonprofit discount. Overall user ratings were good but not as high as the rest on our list. Overall, real-world users liked the software for ease of use but said setup could take some time and the support could be problematic at times.
QuickBooks Payroll Pricing
QuickBooks Payroll offers three different plans that can provide you with a wide range of payroll and HR features to fit the needs of your business. From workers’ compensation administration to a personal HR adviser, QuickBooks Payroll’s tiered plans give nonprofits the ability to choose the plan and pricing that works best for their budget.
Software Fees:
- Core ($45 plus $5 per employee monthly): Includes full-service payroll, health benefits, 401(k) plans, next-day direct deposit, employee portal, and reports
- Premium ($75 plus $8 per employee monthly): Core plan plus same-day direct deposit, access to its HR support center, and worker’s comp
- Elite ($125 plus $10 per employee monthly): Tax penalty protection, access to a 24/7 product support expert, expert setup, time and project tracking, and a personal HR adviser
- Workers’ Comp Payment Service: $5 per month
Adding QuickBooks: If you already use QuickBooks for accounting, you can turn on payroll right from the software. If not, the program is an additional cost, but QuickBooks offers bundled plans that can be cheaper, especially if you have many employees. For example, you’ll see the Elite plan’s per-employee cost is less. If you have more than nine employees, the savings pays for the extra cost of bundling.
- Core plus QuickBooks Simple Start: $75 plus $5 per employee monthly
- Premium plus QuickBooks Essentials: $100 plus $5 per employee monthly
- Elite plus QuickBooks Plus: $160 plus $8 per employee monthly
For smaller businesses, QuickBooks has some discounts on its accounting software through TechSoup. However, there are none for payroll. For help deciding which is best for you, check out our QuickBooks Payroll plans comparison.
QuickBooks lets you pay with direct deposit or print your own checks.
(Source: QuickBooks)
QuickBooks Payroll Features
- Nonprofit features: QuickBooks accounting offers a special solution for nonprofits that can help manage donations. You can integrate this with other accounting software on our list, but it’s seamless with Quickbooks Payroll. Like most on our list, QuickBooks Payroll lets you set up your FUTA exemption easily.
- Flexible direct deposits: In addition to check payments, QuickBooks Payroll offers next-day deposits for its Core subscribers and same-day direct deposits for Premium and Elite plan holders. You can approve payroll to pay your employees through same-day direct deposit if you process payroll by 7 a.m. Pacific time, 10 a.m. Eastern time on payday. The quickest direct deposit speed that most of the other providers on our list can offer is next-day funding, so same-day payments are a huge value add for QuickBooks Payroll.
- Tax penalty protection: In all of its plan options, QuickBooks will cover its own errors. With its Elite plan, QuickBooks will cover the penalty and interest for any payroll tax error for up to $25,000 a year—regardless of who made the error. Experts will also represent you before the IRS and concerned agencies and will help you resolve your issue. Most other providers will only guarantee protection from mistakes they have made, although ADP may provide a full guarantee depending on your plan.
- Customizable reporting: The ability to customize, run, and export reports is very important for nonprofit organizations to be able to understand their costs. QuickBooks allows you to run multiple worksite reports, payroll deduction, contribution reports, and even vacation accrual reports.
Read our QuickBooks Payroll review
Paycor: Best for a Robust HR Solution
What We Like
- Customizable plans to meet your specific needs
- Mobile employee tools available
- Robust HR product offering
What's Missing
- A-la-carte platform with many additional fees
- New hire reporting is only supported with higher-level plans
- HR tools not included with the Basic plan
Paycor Pricing
Plans for fewer than 50 employees:
- Basic: $99 plus $5 per employee monthly
- Essential: $149 plus $7 per employee monthly
- Core: $199 plus $8 per employee monthly
- Complete: $199 plus $14 per employee monthly
50 to 1,000 employees: Call for a quote
Paycor is a payroll and HR solution that offers a full suite of employee management services in one place. In addition to full-service payroll and tax administration, you can also use Paycor for help with recruiting and onboarding new employees and benefits administration. It’s not the cheapest on our list but still an affordable option. Paycor can be a great fit for nonprofits, as it can fulfill many of the duties of an HR department without the cost of hiring a full-time person.
With a score of 4.16 out of 5 in our evaluation, Paycor got perfect scores for its HR features and reporting, and strong scores for payment features. It doesn’t allow unlimited pay runs, however, and does not have a tax penalty guarantee.
Paycor Pricing
Paycor’s pricing is broken down based on the number of employees. Since our last update, it changed its pricing structure, with its Small Business pricing working organizations with one to 50 employees and offering four different plans instead of three.
- Basic ($99 plus $5 per employee monthly): Includes payroll and tax filings, new hire reporting, basic reports, access to Paycor mobile, basic wage garnishments, and OnDemand pay
- Essential ($149 plus $7 per employee monthly): Basic plan plus report building, HR support center, labor law posters, onboarding, time off management, 401(k) EDI processing, e-verify services
- Core ($199 + $8 per employee monthly): Essentials plan plus one-on-one HR support, career management, HR tools
- Complete ($199 + $14 per employee monthly): Core plan plus analytics, compensation planning, and talent management
For more than 50 employees, Paycor offers a plan that includes payroll, benefits, HR tools for workforce management and talent management, and reporting. At the time of this writing, it is offering three months free. Call for a quote.
Paycor offers a complete payroll solution that can include HR.
(Source: Paycor)
Paycor Features
- Nonprofit features: Paycor works with more than 5,000 nonprofit organizations and has dedicated experts for nonprofit experts to consult with for your best plan. In addition, it integrates with Blackbaud Financial Edge, which makes it easy to collect and track donations.
- Payroll processing: With Paycor’s flexibility, your employees can choose from one of the many payment options it offers (direct deposits, physical paychecks, and pay cards). If you prefer checks, Paycor includes check stuffing with every plan. ADP, meanwhile, charges extra for this service. Like several on our list, Paycor can also set up automatic payrolls so that you don’t have to worry about it processing payroll each cycle.
- Benefits: Paycor integrates with dozens of health insurance carriers and other benefits programs, giving you a wide range of choices for your people. QuickBooks, by comparison, uses only a select few, and Gusto only offers benefits in 39 states.
- Customer service: Paycor’s Core and Complete plans offer one-on-one support from certified HR professionals. It also has live phone support, Monday through Friday, 8 a.m. to 8 p.m. Eastern time.
- HR offerings: Similar to ADP Run, Paycor offers a wide range of HR products that can be a huge asset to growing nonprofits. These include onboarding and training, compliance support, time tracking, and scheduling, and even recruiting and applicant tracking. These high-level HR features are not available with Patriot or QuickBooks, and Gusto only offers a few of these services. However, you need the higher Paycor plans to access them.
- Third-party software integrations: Paycor has hundreds of integrations in everything from payment solutions to workers’ comp programs to video conferencing. Background screening is vital for nonprofits, especially churches; Paycor integrates with Sterling, AssureHire, ESR, and GoodHire.
- Reporting: When it comes to reports, Paycor has a big selection of standard reports in addition to customizable reports that you can create and download.
Patriot Payroll: Best for Small Nonprofits That Need a Simple Payroll Solution
What We Like
- Very affordable pricing
- Unlimited pay runs
- US-based customer support with extended weekday hours
- DIY option available
What's Missing
- Full-service garnishments or child support not available
- Limited integration options
- Some functions require an HR add-on
Patriot Payroll Pricing
- Basic (DIY): $17 plus $4 per employee monthly
- Full Service: $37 plus $4 per employee monthly
Add-ons:
- Time tracking: $6 per month plus $2 per employee
- Employee data management tools: $6 per month plus $2 per employee
Patriot Payroll is the only provider on our list that can suit your needs whether you’re looking for a full-service payroll option or a more affordable DIY version for doing payroll. It’s the simplest on our list, with just the most basic payroll tools. Even the HR add-on is for organization, documentation, and HR reports, whereas ADP offers more HR tools and Gusto comes with hiring. However, with budgeting being such an important aspect of nonprofit financials, it is a great option for those looking for an affordable solution.
In our evaluation, Patriot Payroll scored a 3.78 out of 5, gaining points for its affordable software and reporting, and losing points for only offering a four-day direct deposit funding period and lack of HR features. Many other providers on our guide, such as Gusto, offer next-day funding. However, it had a perfect score in popularity, with a 4.8 out of 5 user review rating averaged over multiple review sites―the highest score of all the software we reviewed.
Patriot Payroll Pricing
Since our last update, Patriot has changed its pricing structure. It offers a Basic (DIY) plan and a Full Service plan. HR functions and time and attendance tracking are add-on:
- Basic ($17 plus $4 per employee monthly): Includes unlimited payrolls, employee portal, electronic W-2s, PTO accruals, and contractor payrolls
- Full Service ($37 plus $4 per employee monthly): Basic plan plus Patriot will file and pay all federal, state, and local payroll taxes for you
Additional costs: While Patriot’s DIY approach keeps the price affordable, it also means that many of the features included in the pricing for other providers are at an additional cost for Patriot. These software add-ons include:
- Time tracking: $6 per month plus $2 per employee
- Employee data management tools: $6 per month plus $2 per employee
Patriot also offers 1099 filings for all of your contractors. It’s free for full-service users, but basic users pay an additional cost:
# of 1099s | Pricing |
---|---|
0 to 5 | $20 |
6 to 36 | $20 base, plus $2 per additional form |
2087928 | No additional charge |
Patriot has a clean, bright interface that allows some customizations.
(Source: Patriot)
Patriot Payroll Features
- Nonprofit features: Like the others on our list, you can set FUTA settings for nonprofit, but otherwise, Patriot lacks specific nonprofit tools. It does work with nonprofits, particularly church organizations, however, and offers articles on nonprofit payroll and HR issues.
- Free payroll setup: Just like several payroll services on our list, Patriot offers a free system setup. Its team will request all relevant information and get everything up and running for you. If you prefer to do it yourself, you can utilize its payroll startup wizard.
- Self-service plan: Coming in as the cheapest option on our list, you can save the most money if you choose to file your payroll taxes on your own using Patriot’s self-service plan. We recommend this plan for organizations with fewer than 10 employees, and those only operating out of one state. Otherwise, a DIY approach can get very complicated when it comes to compliance.
- Payroll tools: Both the DIY and Full-service plans let you run unlimited payrolls (compare this to ADP, which limits pay runs). You can add multiple pay rates per employee, which is great if they work at different rates depending on grants. It integrates with AP Integro for paying worker’s compensation insurance premiums. AP Integro is a popular workers’ comp company used by the others on our list too. One drawback is that direct deposit is four days rather than two unless you contact support about the expedited function.
- Highly praised by users: Patriot may not be as feature-rich as others on our list but users give it high praise with over 4.8 out of 5 stars from popular user review sites like Capterra and G2. They called the support team “super helpful” and available and gave kudos to the price and user-friendly interface.
ADP Run: Best for Scalable Payroll Software to Grow With
What We Like
- Well-known brand
- Multiple plan options with flexible features
- Full-service quarterly and annual tax filings
- Serves small nonprofits to international charities
What's Missing
- May require a setup fee; prices often increase after the first year
- Benefits, time tracking, and workers' compensation are add-on products
- Year-end reporting (W-2s/1099s) cost extra
Patriot Payroll Pricing
- Essential: $65 plus $3 per employee monthly
- Enhanced: $88 plus $3.60 per employee monthly
- HR Plus: $144 plus $3.50 per employee monthly
- HR Pro: $220 plus $4.50 per employee monthly
*Quotes based on biweekly payroll. At the time of this writing, nonprofits get three months free.
Add-ons (call for quote):
- Time and attendance
- Workers’ compensation (pay-as-you-go plans)
- Health insurance
- Retirement plans
From an entry-level payroll plan that’s comparable to the other software on our list to full HR and payroll that can serve businesses with up to 1,000 employees, ADP Run’s features are scalable and completely customizable. It’s a great solution for growing nonprofits, particularly those that want to expand internationally. Although more expensive, many of its customer reviews on Capterra highlight its powerful employee management tools. ADP also has the most experience with nonprofits of those on our list and says it can alter its plans to suit your needs.
Earning a 3.72 out of 5 in our evaluation, it’s only the price that kept it from our No. 1 position. It earned 5 out of 5 for HR tools and reporting and very high scores for everything else. If you are looking for HR software as well as payroll processing, then the extra expense can be worth it.
ADP Run Pricing
ADP Run offers four packages, with custom pricing based on the frequency of pay runs. It also charges a setup fee of around $200. However, depending on the time you set up, it may waive the setup fee and give you up to five months of free payroll. This is excellent, but it may increase your price in the next year. This is the quote we received for a biweekly payroll:
- Essential ($65 plus $3 per employee monthly): Full-service payroll, tax filings, next-day direct deposit, new hire reporting, customizable reports, and employee self-service portal
- Enhanced ($88 plus $3.60 per employee monthly): Essential plan plus state unemployment insurance management, ZipRecruiter access, and background checks
- Complete ($144 plus $3.50 per employee monthly): Enhanced plan plus basic HR support
- HR Pro ($220 plus $4.50 per employee monthly): Complete plan plus enhanced HR support and perks for both you and your employees
Additional costs: The preparation, delivery, and filing of W-2s/1099s is an additional cost to the employer. Other additional fees include access to its time and attendance software, workers’ compensation coverage, retirement plans, and health insurance options.
ADP has an intuitive but customizable interface.
(Source: ADP)
ADP Run Features
- Payroll software specific for nonprofits: ADP’s team of professionals has talked to their nonprofit clients about their challenges and has combined their feedback with ADP’s expertise to provide nonprofit payroll solutions that meet the needs specific to the nonprofit environment. For example, it lets you track volunteer hours as well as those of employees and automate the allocation of employee compensation from a respective funding source―a handy time saver when you are working with grants. It has the most nonprofit-specific of those on our list. ADP also integrates with BrightFunds, a leading provider of workplace giving, volunteer management, and grants management.
- Full-service tax filings: ADP Run automatically calculates, pays, and files all payroll taxes on your behalf (federal, state, and local). Not every payroll service on our list handles local taxes. In addition, ADP will respond to all tax agency notices you may receive in case there are questions about tax deposits and returns that the provider made for you. Only QuickBooks provides better protection with its $25,000 guarantee (with higher plans), and it covers mistakes even you make.
- Hiring solutions: With ADP’s Enhanced plan or higher, you get access to ZipRecruiter, a web-based job board that connects small businesses with qualified job seekers. In addition, you’ll get access to other tools that help you hire the right employees, such as background checks and digital onboarding documents. Paycor, meanwhile, only offers background checks through integrations.
- HR documents: ADP has a library of key HR documents that you can use for your checklists, best practice guides, and company policies. Aside from HR documents, you also get an employee handbook wizard to help you create a comprehensive handbook based on federal employment laws. However, access to these resources requires a paid subscription to one of ADP’s premium payroll packages. Only Paycor has similar offerings.
- Access to certified payroll professionals: With ADP Run, you can get in touch with payroll and HR experts whenever you need them. With one of ADP’s premium plans, you can get legal assistance on employment matters from Upnetic Legal Services.
How We Evaluated
We compared several of the most popular providers and narrowed it down to the top five, specifically focusing on features that would be most valuable for nonprofit organizations. We looked for payroll providers that offer unlimited pay runs, flexible direct deposit schedules, seamless integrations with third-party software, and the availability of both basic and customized payroll reports.
We evaluated each software based on the following criteria:
35% of Overall Score
Aside from affordable monthly fees (Patriot is the most affordable in our guide), when you’re working within a budget, it’s important to know what additional costs you could incur. For example, Gusto offers unlimited pay runs while many other providers will charge for every payroll run in addition to your normal pay cycle. Hidden fees and upcharges can take a huge hit on your budget, so we’ve made sure to break down what’s included and what’s extra in pricing. In our scoring, we also took into consideration whether the provider offers special pricing or discounts to nonprofits.
25% of Overall Score
We evaluated the providers by many of the features that we think are the most valuable for nonprofits. Unlimited pay runs, quick direct deposits, full-service tax filings and payments (federal, state, and local), and contractor payments are just a few. We also checked whether or not the provider offers a penalty-free guarantee, in the event that it makes a mistake when processing your payroll. Gusto and ADP Run are two of the top-ranking providers here.
20% of Overall Score
Having a payroll provider that’s easy to use is key for busy nonprofits. Quick problem resolution and live phone support when there are questions add a huge value to what a provider brings to the table. We made sure to keep third-party integrations in mind as seamless integrations between payroll and accounting are key for nonprofits. Gusto, Patriot, and QuickBooks Payroll scored high here.
10% of Overall Score
The best payroll software for nonprofits includes basic HR tools, such as online onboarding, new hire reporting, and employee benefits. Self-service portals that allow your team to manage their information also hold a huge value. ADP Run had the highest score here, with 4.75 out of 5.
5% of Overall Score
We think customer reviews are an important factor, and we want to consider feedback from real customers when grading providers. We checked reviews left on third-party sites like Capterra, G2, and TrustRadius. Every service on our list scored high from users but, overall, Gusto and Patriot earned the top spots for score and number of reviews.
5% of Overall Score
Aside from having access to basic payroll summaries, users should be able to customize and create new reports within the system. Reporting is especially important for nonprofits that need an easy way to determine their payroll costs. Everyone earned a perfect score except Patriot, which does not have new report building.
Payroll Software for Nonprofits Frequently Asked Questions (FAQs)
Are there special rules for nonprofit payroll?
Yes. Nonprofit organizations are exempt from federal unemployment taxes and, in some cases, state unemployment taxes. Be sure to check that your payroll software notes this to avoid adding undue expenses and complications.
How does payroll software help me as a nonprofit?
Payroll can take a lot of time and energy to stay on top of, yet it’s vital that you are accurate and timely. Not only can mistakes or late payrolls cause ire with your paid employees, but they can put you in violation of the law. Payroll software makes it easier to pay employees―sometimes taking only minutes to complete―plus offers automated checks to make sure you are error-free and in compliance with federal, state, and even local laws.
Do nonprofits pay payroll taxes?
Yes. You must withhold federal, state, and local income taxes as well as FICA (Social Security and Medicare) taxes from all qualifying employees. The exception to this may be clergy, who are often considered self-employed for calculating FICA and, thus, you may not need to pay this on their behalf. Learn more in IRS Publication 517.
Do I have to pay my employees minimum wage?
Yes, because minimum wage applies to all qualified employees. There are some exceptions. Check with the US Department of Labor (DOL) or your state for details. The minimum wage is currently $7.25 an hour or higher if your state or local municipality has its own rate.
Bottom Line
Whether you’re looking for a full-service solution or a more DIY approach, our guide can help you determine which software is the right fit for your nonprofit organization. It’s important that you find the best payroll software with the features you’ll need, such as full-service tax filings and quick direct deposits, while remaining within your budget.
Based on our evaluation, we found Gusto to be the best payroll software for nonprofits with an overall score of 4.37 out of 5. It offers affordable plans that start at $40 plus $6 per employee monthly, plus a contractor-only option that costs $6 per person monthly. Gusto is a crowd favorite with its user-friendly time tracking and quick direct deposit options. This makes Gusto the best option for nonprofits that want quality services at a budget-friendly price. Sign up for a free trial.