People are the heart of nonprofit success. Having the right system in place can make all the difference in attracting, retaining, and supporting mission-aligned talent.
HR and Payroll Software for Nonprofits
Your mission is counting on human resources.
Why Nonprofit organizations use Paylocity
All-in-one platform for your workforce
Unify systems to achieve more impact
- Consolidate outdated systems to automate and streamline processes like payroll, onboarding, expense management, and benefits admin.
- Reduce risk and drive data-based decisions with timely, accurate reporting and practical insights.
- Unlock visibility across HR, Finance, and IT to make data driven decisions about workforce and spend management.
Be audit-ready at all times
- Manage pay and employee spend across complex classifications and funding sources, including grant tracking and labor allocations.
- Access real-time reporting to support Form 990 prep and stay up to date with evolving regulations.
- House documents, training records, and data compliance checks in one centralized system.
Strengthen community to improve retention
- Keep programs fully staffed with modern recruiting tools, automated training, and shorter time to productivity.
- Guide employees through change with consistent communication and use surveys to keep a pulse on morale.
- Recognize and reward exceptional performance to let staff know their hard work is appreciated.
Manage people better with one source of truth
- Monitor training, licenses, and certifications to prevent service interruptions and billing issues.
- Connect turnover, attendance, and client feedback to spot potential burnout, refine scheduling, and target coaching.
- Use market insights to keep pay competitive and foster proactive conversations.
Loved by employers and employees
What makes Paylocity different?
Take a self-guided tour
Experience the Paylocity difference in this interactive tour through some of our time-saving features and innovative employee tools.
Supporting Nonprofit leaders like you
Historic zoo builds a sustainable future with smarter HR
Lincoln Park Zoo brings its people-first mission to life with Paylocity — creating a more modern habitat for staff, volunteers, and future generations.
Museum scales up for racing season
The Kentucky Derby Museum switched to Paylocity for 95% faster payroll and streamlined recruiting to win over first choice candidates.
Public library shelves disjointed technology
Boulder Public Library used Paylocity to consolidate onboarding, payroll, training, and integrate with other systems to keep operations running smoothly.
related resources
Payroll,
Human Resources
Case Study
November 09, 2021
Payroll,
Human Resources
Case Study
February 25, 2021
FAQs on Nonprofit Payroll
Do nonprofits have to pay payroll taxes?
501(c)(3) organizations are not exempt from payroll taxes and are responsible for withholding certain federal, state, and local taxes for their employees via employee paychecks.
What makes a nonprofit organization tax exempt?
For a nonprofit to be tax-exempt, it must be organized and operated according to section 501(c)(3) of the Internal Revenue Code. Generally, these are charitable organizations whose earnings are not distributed to shareholders.
How do nonprofits pay employees?
Nonprofits pay employees the same way as for-profit organizations do! Employees are given a salary as determined by their positions and may be eligible for bonuses and other compensation, depending on the organization’s policies.
Am I able to separate employee pay by grants?
Nonprofits may use grants to cover payroll expenses, but there must be meticulous record-keeping to ensure each working employee’s time is spent on grant-related activities. It depends on the grant, so be sure to carefully read the terms before using the funds for payroll.
How can I track volunteer hours with my nonprofit organization?
Volunteers can clock in and out with an employee time collection function that accurately records their working hours.
Do nonprofits need an HR department?
Many small nonprofits manage without an HR department, but human resources plays a crucial role in any organization. From administrative tasks like payroll and benefits administration to building company culture, HR is more important than ever — no matter the industry.