Nonprofit Payroll Software: Prices, and the Tax Settings That Matter

For a nonprofit with a handful of staff, payroll software costs between $600 and $1,300 a year at published prices, and the products differ less on price than on whether they handle the three things that make nonprofit payroll different from a small business’s: the federal unemployment tax exemption, the option to reimburse state unemployment instead of paying into it, and a retirement plan that is usually a 403(b). Get those wrong and the software overcharges you in tax every quarter without anyone noticing.

This page compares the products whose prices are published, at the headcounts nonprofits actually have, and sets out what to check that the vendor comparison pages leave out.

How many staff nonprofits actually pay

From 256,539 charities’ Form 990 returns, the median employer spending $250,000 to $1m has seven employees, and the median under $250,000 has three. A quarter of all charities with employees have four or fewer. Payroll software for this market is overwhelmingly a small business purchase, and the tiers built for 500 people are not the relevant comparison.

The payroll tax column is a quiet confirmation of the most important nonprofit rule below. Employer social security and Medicare tax is 7.65% of wages. Charities’ total payroll taxes run between 7.17% and 7.90%, barely above it, because 501(c)(3) organizations pay no federal unemployment tax. A for profit employer pays that on top. If your own payroll taxes run noticeably higher than these figures, the first thing to check is whether the software is charging you FUTA.

What each costs at nonprofit headcounts

Every price below was read on the vendor’s own pricing page in October 2026. Annual cost is twelve months of the base fee plus the per person fee, at the three median headcounts from the table above.

Two notes on reading it. QuickBooks Payroll is sold bundled with QuickBooks Online accounting, so its price includes a Simple Start accounting subscription; an organization using the donated QuickBooks Online Plus from TechSoup cannot add payroll to that donated subscription, because TechSoup states payroll is not available through it, and has to buy payroll at full price. And Gusto’s entry plan pays employees in one state only; a remote employee in a second state means its Plus plan, which roughly doubles the per person fee. OnPay includes every state in its single plan. SurePayroll charges $9.99 a month for multi state payroll.

Rippling, Paychex and ADP do not publish prices and require a quote. Patriot Software’s pricing page sits behind a bot check that we did not bypass, so it is not priced here.

The three things that make nonprofit payroll different

1. No federal unemployment tax. Service for a 501(c)(3) organization is excluded from the definition of employment for the Federal Unemployment Tax Act, 26 U.S.C. 3306(c)(8). For a business, FUTA is 6.0% of the first $7,000 of each employee’s wages, usually reduced to 0.6% by the credit for state unemployment tax, according to the IRS. A charity owes none of it. Software set up with a generic business profile will calculate and file it anyway, which costs up to $42 an employee a year at the reduced rate, and recovering it means amended returns. Set the exemption at setup and check the first quarter’s Form 940 treatment.

2. You may not have to pay state unemployment tax either. Federal law requires every state to let 501(c)(3) employers choose between paying state unemployment contributions like any business or reimbursing the state fund only for benefits actually paid to their former employees, 26 U.S.C. 3309(a)(2). Reimbursing can be much cheaper for an organization with stable staff and expensive after a layoff, which is why some nonprofits join trusts that pool the risk. The payroll question is practical: if you elect reimbursement, the software must stop calculating state unemployment tax for each pay run. Ask each vendor whether it supports a reimbursable employer setting in your state before you sign.

3. Retirement plans are usually 403(b)s. Most nonprofit retirement plans are 403(b) plans rather than 401(k)s, and the payroll system has to take pre tax deferrals and send them to the plan provider each pay period. Fewer charities offer one than you might expect: only 15.3% of employers spending $250,000 to $1m report any pension plan contributions, rising to 39.6% at $1m to $5m. If you plan to add one, confirm the payroll product integrates with the 403(b) provider you are likely to use, rather than relying on a manual upload every pay run.

The fourth thing, which funders care about

Grant funded posts need their wages allocated to the grant. Form 990 also requires every organization filing the full return to split expenses, including salaries, between programme services, management and fundraising. Payroll software that can tag each employee, or each hour, to a department, class or project, and export that to the accounting system, turns a monthly spreadsheet into a report. Most products here do it at some tier; check which tier before assuming the entry plan does.

The products

Gusto

Best for: small organizations in one state wanting the simplest setup. Simple is $49 a month plus $6 a person; Plus, with multi state payroll and time tracking, is $80 plus $12. Wrong for: anyone with staff in several states on a tight budget, where the Plus plan’s per person fee doubles the bill. Gusto pricing.

OnPay

Best for: the same small organizations, when staff are spread across states. One plan at $49 a month plus $6 a worker, with every state, W-2s, 1099s and year end filings included and no setup fee. Wrong for: organizations that want HR and benefits administration as deep as the larger platforms. OnPay pricing.

SurePayroll

Best for: the smallest payrolls, where the low base fee matters most. From $29 a month plus $7 a worker, with $9.99 a month for multi state payroll. At three employees it is the cheapest published option here. Wrong for: growing teams, where the higher per worker fee overtakes the others by around 20 employees. SurePayroll pricing.

QuickBooks Payroll

Best for: organizations already keeping their books in QuickBooks Online and wanting one login. Plans bundle payroll with QuickBooks accounting, from $88 a month plus $6.50 an employee with Simple Start. Wrong for: organizations on the donated TechSoup QuickBooks subscription, which cannot include payroll, so the bundle means paying again for accounting they already have. QuickBooks Payroll pricing.

Paychex, ADP and Rippling

Best for: larger organizations wanting payroll, benefits, HR and compliance from one provider with a named contact. All three price by quote. Wrong for: a five person organization comparing prices, which cannot do so without three sales calls.

A professional employer organization

Worth naming because it changes the question. A PEO becomes the co-employer of your staff and runs payroll, benefits and compliance under its own plans, which can give a small organization access to group health insurance it could not buy alone. It costs considerably more than payroll software, and it makes sense when benefits, not payroll, are the problem you are solving.

What payroll costs against what you spend on staff

Among charities with employees, wages are a median 43.4% of spending for organizations of $250,000 to $1m. For a $500,000 organization that is roughly $217,000 of wages, against about $1,100 a year for payroll software at seven employees. The software is around half of one percent of the payroll it runs, and the expensive mistakes are the tax settings above, not the subscription. Choose on whether the product handles them, and on whether your bookkeeper already knows it.

Payroll is a separate purchase from accounting software, a point the nonprofit accounting software comparison makes from the other side, and payroll taxes and benefits are the line first time budgets most often leave out, which the nonprofit budget template includes for that reason.

Before the first pay run

Most of what goes wrong with a first nonprofit payroll is decided before the software is opened. In order:

1. Register with the state. Withholding and unemployment accounts, with your state revenue and labor agencies. This is where you choose between paying unemployment contributions and electing to reimburse, and the election usually has a deadline tied to when you start paying wages.
2. Buy workers’ compensation. Most states require it from the first employee, and it is bought from an insurer or a state fund, not from the payroll vendor, although several vendors can arrange it.
3. Collect the forms. A Form W-4 and Form I-9 from each new hire, and a state withholding form where your state has one.
4. Set the tax profile. Mark the organization as a 501(c)(3) exempt from FUTA in the software, and as a reimbursing employer if you elected that, then check the first quarter’s filings before trusting it.
5. Map wages to the books. Decide the departments, programmes or grants each person’s pay is charged to, so the payroll export lands in the accounting system already split the way your Form 990 and your funders need it.

Each of these takes an afternoon at the start and weeks to unwind if skipped.

How this list was made

Products were chosen from those ranking for nonprofit payroll searches in October 2026 and those a US nonprofit under $5m would plausibly consider. Prices were read on each vendor’s own pricing page on 6 October 2026, and products that publish no price are named as such rather than estimated. The headcount, payroll tax and retirement figures are from the IRS processing year 2024 Form 990 extract, 256,539 charities spending $25,000 or more; 33 implausible employee counts were excluded.

Questions people ask

Do nonprofits pay payroll taxes?

Yes, with one large exception. A 501(c)(3) employer withholds income tax and pays employer social security and Medicare like any business, but owes no federal unemployment tax, and can choose to reimburse its state unemployment fund instead of paying contributions.

Charities' payroll taxes run about 7.7% to 7.9% of wages in IRS data, barely above the 7.65% FICA rate.

Are nonprofits exempt from FUTA?

501(c)(3) organizations are. Federal law excludes their employees' service from FUTA. Other nonprofits, such as 501(c)(4) or (c)(6) organizations, generally are not, so check which subsection your determination letter names.

What is the cheapest payroll software for a nonprofit?

At published prices for three employees, SurePayroll at about $600 a year, then Gusto Simple and OnPay at about $804. Above roughly 20 employees the lower per person fees of Gusto Simple and OnPay overtake it. Paychex, ADP and Rippling price by quote.

Can I get QuickBooks Payroll through TechSoup?

No. TechSoup's donated QuickBooks Online subscription excludes payroll, and payroll has to be bought from Intuit at full price.

What is a reimbursable employer for unemployment?

A 501(c)(3) that has chosen, as federal law requires every state to allow, to repay the state unemployment fund only for benefits paid to its own former employees instead of paying a contribution rate on every payroll. It is cheaper with stable staff and riskier after layoffs, and the payroll software must be set up to stop calculating state unemployment tax.

Do nonprofits use 403(b) or 401(k) plans?

Mostly 403(b)s, which are available to 501(c)(3) employers, though nonprofits may offer 401(k)s too. Only 15.3% of charities with employees spending $250,000 to $1m report any pension contributions, so many small nonprofits offer neither.

How many employees does a typical nonprofit have?

The median charity with employees has 3 if it spends under $250,000, 7 at $250,000 to $1m and 25 at $1m to $5m, from IRS Form 990 data. 29.0% of the smallest charities have any employees at all.

Should a small nonprofit use a PEO?

When benefits are the problem rather than payroll. A PEO can give a small organization access to group health insurance as a co-employer, at a cost well above payroll software. If you only need people paid and taxes filed, software is enough.