Best Payroll Services for Nonprofits in 2023

• Nonprofit functionalities: Gusto makes it easy to set your Federal Unemployment Tax Act (FUTA) exemption (the others on our list also do this). It 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. Gusto even reports these contributions automatically in Box 14 of the IRS Form W-2. None of the other payroll software for nonprofits we reviewed offer a similar feature.
• Employee benefits: Gusto can broker with 30 carriers for more than 9,000 benefit plans, including health insurance, 401(k)s, FSAs, commuter benefits, 529 college savings, and more. While it provides access to both standard and non-standard benefits options, Gusto’s health insurance is unavailable in 13 states: Alabama, Alaska, Hawaii, Louisiana, Mississippi, Montana, Nebraska, North Dakota, Rhode Island, South Dakota, Vermont, West Virginia, and Wyoming.
• Financial benefits: Gusto offers great financial wellness tools. Its free Gusto Wallet app provides access to a debit card and lets employees create budgets, set savings goals, and split paychecks among multiple accounts.
• 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.

Gusto’s standard direct deposit processing timeline is two and four days, with a next-day option if you subscribe to its higher tiers. If you want fast payments, but you’re not keen on upgrading your plan, consider QuickBooks Payroll. It offers next-day direct deposits in all of its plans and same-day direct deposits in premium ones.

QuickBooks Payroll is also a good option if you’re looking for nonprofit payroll services to process only contractor payments. Its contractor plan is even more affordable than Gusto’s ($15 for 20 contractors plus $2 for each additional worker vs $35 plus $6 per worker) and comes with next-day direct deposits and unlimited pay runs.

• Nonprofit functionalities: Like most on our list, QuickBooks Payroll lets you set up your FUTA exemption easily. If you use QuickBooks Accounting, it offers a special solution for nonprofits that can help manage donations and track how money is spent for fundraising programs. You can integrate this with other payroll software on our list, but it’s seamless with QuickBooks Payroll.
• 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 tax filing mistakes. 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. The tax penalty program of the other providers on our list only covers mistakes that its representatives make.
• 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.

While QuickBooks Payroll has an online wizard to guide you through the setup process, it only offers its setup services to Elite plan holders. If you require help creating your account and adding your employee data into the payroll system, consider Patriot Payroll, as it provides this service for free.

QuickBooks Payroll also only has a handful of HR solutions for managing the entire employee lifecycle. For a robust HR payroll system, try Rippling. It has a wide suite of HR solutions—from hiring and time tracking to learning management and compensation planning.

• Nonprofit functionalities: With OnPay, you get automated state and federal taxes, including the expert handling of FUTA exemptions for nonprofits and charitable organizations. If you receive grant funding, OnPay can help you separate employee pay by grant items.
• Payroll support: OnPay’s cloud-based platform lets you process payroll as many times as you want and with only a few clicks. Also, if you need support, the provider has a team of payroll experts you can contact from Mondays to Fridays either through phone, chat, and email. Weekend support is also available, but only through email and for emergency cases only.
• Employee benefits: Gusto and QuickBooks Payroll’s health insurance coverage may be limited, but OnPay’s health plans are available in all 50 states. It grants access to most major providers (such as Aetna, United Healthcare, and Humana). Plus, you can easily generate employee census data reports, which you can use to get accurate benefits and health insurance quotes for your business.

OnPay may provide unlimited pay runs, solid payroll compliance support, and an easy-to-use platform, but you won’t be able to choose your direct deposit payout timelines. The eligibility for either a two- or four-day direct deposit is based on OnPay’s assessment. For direct deposit payouts without assessment requirements, we recommend Gusto. Two-day payouts are available in its basic plan, with a next-day option in higher tiers.

If you’re looking for a robust HR payroll system, consider Rippling. Its HR solution suite can manage hiring, payroll, employee benefits, learning programs, and even compensation planning. Basic finance and IT tools are also available for handling expense reimbursements, managing business software access, and tracking the issuance of computers assigned to employees. It even has a modular platform, allowing you to choose the HR and IT solutions that your business needs.

• Nonprofit functionalities: Aside from streamlining payroll processes, Rippling integrates with Bright Funds, a solution that supports employee donations and workplace giving programs. In addition, Rippling automates compliance tasks—from remitting and filing payroll taxes to managing ACA notices across 50 states.
• Employee onboarding: Regardless of whether you’re recruiting employees or contract workers, Rippling makes new hire onboarding easy. When new employees are added into its system, Rippling automatically adds them for upcoming pay runs, enrolls them in eligible benefits (e.g., time off or vacation leave), and provides them access to your business apps, such as Slack, Zoom, or Microsoft 365.
• Employee benefits and perks: Health benefits, retirement plans, and workers’ compensation are just some of the benefits that Rippling provides access to. Plus, its integration with solutions like Giften and Goody allows you to add meal perks and electronic gifts as rewards or benefits under your employee recognition program.
• Robust integration options: Rippling connects with more than 500 apps—from finance and office management systems to graphic design and collaboration software. So, if your nonprofit organization is tech-heavy, it’s highly likely that you can integrate the apps that you use with Rippling.

Rippling may have a feature-rich platform with efficient automation tools, but it doesn’t have a support team that you can easily contact via the phone. You have to chat with one of its representatives to set a schedule for the call. For a support team you can easily contact via phone, consider any of the providers in this guide. Gusto is also a great choice, especially if you require priority support with access to a direct phone line. However, you have to upgrade to its higher plan for this option (or pay $8 per employee monthly if you’re on the Plus plan).

If your nonprofit employs mostly contract workers, it may be best to partner with QuickBooks Payroll. Unlike Rippling, the provider offers a contractor payments plan, which only costs $15 monthly for 20 workers (+ $2 for each additional contractor monthly).

• Nonprofit functionalities: Like the others on our list, you can set FUTA settings for nonprofit; otherwise, Patriot lacks specific nonprofit tools. It does work with nonprofits, particularly church organizations, and offers help articles on nonprofit payroll and HR issues.
• Free payroll setup: Patriot’s team will request all relevant information and get everything up and running for you—at no extra cost. If you prefer to do it yourself, you can utilize its payroll startup wizard.
• Self-service plan: You can save the most money if you choose to file your payroll taxes on your own using Patriot’s Basic tier. 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 Intego for paying workers’ compensation insurance premiums. AP Intego is a popular workers’ comp company used by the others on our list too.

While Patriot’s DIY approach keeps the price affordable, it also means that many of the features (such as time tracking and employee data management) included in the pricing for other providers are an additional cost for Patriot. Another drawback is that direct deposit is four days rather than two, unless you contact support about the expedited function. If you want fast direct deposits, QuickBooks Payroll offers next-day payments in its starter tier.