Best Payroll Software for Nonprofits in 2023

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)

• 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 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)

• 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.

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)

• 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.

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:

Patriot has a clean, bright interface that allows some customizations.
(Source: Patriot)

• 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 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)

• 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.

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.

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.

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.

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.