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.
Streamline HR & Payroll to Focus on Your Mission
The community relies on your organization, and your employees rely on you. Keep them informed, connected, and engaged without the extra administrative hassle. Our HR and payroll software helps your nonprofit focus on what matters most to your organization.
- Reduce costs by automating workflows in payroll, employee management, and benefits administration.
- Maintain federal, state, and local regulatory compliance with support of our tax experts.
- Attract and engage diverse workers by creating an environment that draws talent in and helps retain them.
Your Work Is Too Important to Slow Down
Keep your nonprofit’s bottom line top of mind with an all-in-one solution.
Run Quick, Accurate Payroll
Simplify nonprofit payroll with user-friendly software built for your complex needs.
- Track time spent on grant-related work to easily report on payroll expenses connected with a specific grant.
- Accurately withhold federal income tax and FICA (Social Security and Medicare) taxes from employee paychecks.
- Stay within your budget by right-sizing your payroll solution to fit your organization’s needs.
Automate HR Duties
Streamline management of nonprofit employees, documents, and compliance.
- Give employees access to a self-service portal where they can access pay stubs, tax documents, schedules, and more.
- Get quick access to work authorizations, EEO and FLSA compliance data, industry news, certifications, and other compliance courses.
- Streamline information collection, document collection, and task completion across your workforce.
Manage Workforce Time Tracking
Track employees’ and volunteers’ working hours and get powerful insights from real-time reports.
- Eliminate paper timesheets and reduce administrative burden.
- Enable workers to clock in via mobile app, web, kiosk, or other timeclock options.
- Minimize compliance risk with self-set schedule rules around things like age, capacity, and employee classification.
Leave It To Our Experts
Ensure compliance with federal, state, and local tax regulations and maintain 501(c)(3) tax-exempt status.
- Prepare and file Form 990 accurately, completely, and with ease.
- See company-level and employee-level tax setup in real-time.
- Get peace of mind with our promise to assume liability, penalty, or interest charge in the event of a Paylocity error.
Take a Data-Driven Approach
Make impactful, cost-effective decisions and improve diversity, equity, inclusion, and accessibility (DEIA) in your nonprofit organization.
- Empower candidates or volunteers to share their preferred name, mask information that may promote bias in the hiring process, and ask optional identity questions in the application.
- Administer anonymous employee surveys to ensure you hear from your entire diverse workforce.
- Monitor and report on the diversity of your workforce to meet your nonprofit organization’s DEIA goals.
“We saved 1,200 hours of staff time per year with Paylocity by automating HR functions, which enabled the HR to team focus on strategic initiatives such as DEIA.”
“When all your data lives in one system and you have a good reporting tool — the data is king. It makes it so easy to see the breakdown of turnover, gender, age, and labor costs.”
“Having a dedicated team that understands how we are set up and our nuances is really important. They help us work through any questions, and there is always an opportunity or a solution. That’s really big for us.”
The Paylocity Difference
Your nonprofit is changing the world, starting with your people. We partner with you and offer award-winning support of your mission and your team.
We invest 15% of our revenue back into our product, developing key features that engage your employees in the platform every day.
Give employees not only the power to access info like PTO balances and pay stubs, but a means to stay connected and better collaborate.
Supporting Nonprofits Just Like Yours
See how other nonprofits have leveraged our platform to return their focus to their causes.
Embracing Tech to Focus on Community
Learn how YMCA of Greater Grand Rapids automated its HR and payroll processes, so they could put the focus on enriching the community.
Nonprofit Digs Out of Paperwork
Discover how Universal Metro Asian Services (UMAS) streamlined onboarding, got new staff in to work faster, and acquired funding more easily.
How to Find the Right HR & Payroll Solution for Your Nonprofit
Not all HR technology is created equal. Use this guide to help you find the right solution to keep your nonprofit competitive and your workforce thriving.
December 15, 2022
Time & Attendance
May 18, 2023
June 3, 2022
FAQs on Nonprofit Payroll
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.
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.
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.
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.