Nonprofit payroll software: 
What to look for

When you work in the nonprofit sector, you know how critical it is to manage not just your mission but also your margins, and to do so with limited budget and staff, while managing reams of regulation. You're expected to make an impact while satisfying donors, making payroll each month, and staying compliant with IRS rules and 501(c)3 requirements. Payroll certainly isn't the least of your worries, but it can be less of one when you choose the right payroll software.

Nonprofit payroll needs to integrate with your existing account systems to ensure accuracy in financial reporting and fund management. The payroll software itself should be affordable while having essential features, like built-in capabilities that help you keep up with tax-exempt status requirements and reporting obligations.

With ADP you get payroll and HR solutions customized for nonprofits with an emphasis on compliance and efficiency. Our nonprofit payroll services are designed to meet the unique challenges faced by nonprofit organizations, from dealing with different types of funding sources to tax filing.

Nonprofit payroll tools designed for ease of use

There’s nothing more daunting than having to learn a complicated software system that’s supposed to keep your organization running smoothly. Nonprofit payroll software should have an intuitive design interface so that any one of your staff members, regardless of technical skill, can easily access and navigate the system. When you’re implementing a payroll software solution, the less training required the better. So, make sure your nonprofit payroll software is quick and easy to implement and facilitates getting everyone up to speed quickly.

Explore With ADP you get easy, reliable payroll processing for your nonprofit

Scalable payroll software for growing nonprofits

As your organization expands, so do your payroll software needs. A good payroll software for nonprofits needs to accommodate more employees and more complex organizational structures. Plus, what your nonprofit requires now in terms of software features, it may not need in the future. So be sure to choose payroll software with features that can be added or removed as your needs evolve.

For both W-2 and 1099 employees

Your team may be made up of full-time employees, independent contractors or both, which means your payroll software has to be able to efficiently handle everything from tax calculations to reporting for W-2 and 1099 workers. Keeping compliant is always a concern, so the best payroll services for nonprofits should include the ability to automatically generate and file the necessary tax forms for different types of employees — to help reduce your administrative burden and ensure compliance with laws and regulations.

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Nonprofit payroll software that helps you stay compliant

For a nonprofit to maintain its 501(c)3 status, it’s critical to comply and keep up with regulatory changes. Your payroll software should be able to stay current with federal, state, and local tax laws while also making it easy for you to maintain accurate records and have visibility into your payroll data at all times. Being audit-ready means using nonprofit payroll software that simplifies payroll data for audits and financial reviews. ADP’s solution helps you stay compliant and provides tools to help nonprofits like yours adhere to legal requirements.

Local regulations

At the local level, there’s state-specific tax handling that your nonprofit payroll software should be able to accommodate. Consider varying state tax requirements as well as unemployment insurance and other local mandates that require tax compliance and know-how. If your nonprofit operates in multiple states, payroll gets a bit more complicated so you need a system that can manage the different tax codes and compliance rules dictated by individual jurisdictions. Our nonprofit payroll services help you stay compliant across multiple states and countries.

Payroll tax exemptions

As a nonprofit organization, you may be exempt from certain payroll taxes. A good payroll software for nonprofits can help identify and accurately apply relevant exemptions. Accurate tax reporting is also crucial to your success, so be sure to choose a nonprofit payroll software that can reflect your tax exempt status through error-free tax filing and compliance, to help you avoid penalties. ADP can assist your nonprofit in managing payroll tax exemptions, such as the federal unemployment tax exemption available to 501(c)(3) organizations.

Form 990 filing

Making sure your IRS Form 990 is completed accurately and filed on time every year is important for your nonprofit. First of all, it’s public. It shows your ongoing tax-exempt status and provides details about your revenue, expenses and governance policies. Secondly, it tells donors, journalists, potential funders and others that you’re a legitimate nonprofit that’s operating responsibly. Form 990 is required by law and it’s what helps you maintain your 501(c)3 status. Any payroll software for nonprofit organizations needs to be able to streamline the collection and organization of data needed for Form 990, and the software needs to integrate with your existing reporting tools. With ADP’s nonprofit payroll services, you get integrations that facilitate Form 990 filing so you can meet your annual reporting requirements.

Seamless integration with nonprofit payroll systems

Imagine having your payroll system sync perfectly with your other tools, from accounting to contact management. Using payroll software with integrations and broad capabilities can help you save on time and resources while also helping minimize the risk of errors and giving you greater visibility into your entire ecosystem. ADP gives you access to integrations and a variety of tools that can streamline your operations.

Nonprofit payroll solutions that save time and money

Time and money are often what nonprofits struggle to have enough of, so your payroll software should be able to help save on both. Make sure the software you select is able to automate payroll processes, like tax calculations, direct deposits, and reports, in order to give you and your team more time to focus on your core mission.

Explore ADP's nonprofit payroll services support both W-2 and 1099 workers

Dedicated support for nonprofit payroll needs

ADP is here to help your nonprofit succeed with user-friendly tools and dedicated service from payroll and HR experts. Whether you're looking for dependable advice through prompt support or self-service options, or need to customize your implementation plan with design, change management, go-live support and optimized training, ADP has you covered. Plus, our top-rated mobile app gives you on-the-go access to payroll, reporting and onboarding — from anywhere. With packages tailored by number of employees, you can get trusted, scalable services that match the unique needs of your nonprofit.

Make the switch to smarter nonprofit payroll tools

Thinking of switching nonprofit payroll providers? We make switching to ADP as straightforward and stress-free as possible. Wherever you are in your annual cycle, we help minimize disruption to your operations by offering a clear and comprehensive list of required information to ensure a smooth changeover along with dedicated support to guide you along the way. We're here to help you stay compliant, file your taxes on time and integrate seamlessly with your existing systems.

ADP Editorial Team The ADP editorial team is comprised of human resource professionals with extensive experience solving complex HR challenges for businesses of all sizes.