Payroll Software for Nonprofit Organizations in 2026: Hosted, Free and Open-Source Options

The best payroll software for nonprofit organizations is the one that can code each paycheck to a grant, fund or program and pass it to your accounting software. Enlisted does not list a payroll product built only for nonprofits. The practical shortlist is OnPay, Patriot Software and Gusto for small US organizations, ADP for larger staffs, and QuickBooks or Xero to hold the books, because those vendors publish nonprofit pages or integrations that carry grant coding.

This guide sorts picks by job: payroll products with a nonprofit offering, accounting tools that carry the coding, and free or open-source options. It is honest about the gap: what is free in this market usually covers hours or books, not tax filing.

What nonprofits should check before choosing payroll software

Nonprofit payroll looks like ordinary payroll with extra reporting. Four requirements decide most choices, and each can be tested with a vendor demo.

• Grant and program coding. If grants pay part of a salary, you need to split labor cost across funds and show it to funders. Look for classes, departments, tracking categories or a grant allocation feature, and check whether the totals reach your ledger.
• Tax-exempt setup. OnPay's 501(c)(3) page says it lets organizations use their exemption from federal unemployment tax without extra steps, and Patriot's nonprofit page lists tax exemptions as a feature. Ask any vendor how it handles your organization's status and state rules.
• Who you pay. Employees, contractors and board members are treated differently. OnPay's nonprofit page names W-2 employees, 1099 contractors, volunteers and board members, so ask each vendor which of these it can pay.
• Accounting connection. Payroll that posts journal entries to your books saves a monthly reconciliation. Check which accounting package each payroll product connects to.

Pricing models also differ: flat monthly fees, per-employee fees or sales-led quotes. Ask whether the vendor has a nonprofit program, since Enlisted's pricing data does not show one.

How we picked

Enlisted looked at which payroll and accounting tools name nonprofits in their listings or on their own pages, then checked the vendor's nonprofit or integration pages where they could be read. Licence, self-hosting and published pricing come from Enlisted's listings, and the cards show live data. Tools that only mention donations or fundraising, such as donation trackers, were left out because they do not run payroll. See how Enlisted ranks tools. This guide is not tax or legal advice.

Payroll products with a nonprofit offering

1. OnPay: best payroll for small US nonprofits with grant-funded pay

OnPay is payroll and HR software for small US businesses, known for flat-rate pricing and full-service payroll. It publishes a nonprofit page for 501(c)(3) organizations that lists W-2 employees, 1099 contractors, volunteers and board members, supports the federal unemployment tax exemption, and says unlimited pay runs let you split pay by grant item. Reports can be summarized by location, department, position or custom pay type.

Enlisted lists benefits administration, employee records and HR tools too. The vendor's site blocked automated reading when the listing was prepared, so confirm fees and states on its pricing page.

• Best for: small US nonprofits that need grant-by-grant labor reports and predictable fees.
• Watch out for: US only, and no free plan. Confirm how splits post into your accounting software.

2. Patriot Software: best payroll plus accounting pair for a small nonprofit

Patriot Software offers online payroll and accounting for small US businesses, and it has a dedicated nonprofit payroll page. That page lists tax exemptions, multiple pay rates, W-2 employees and 1099 contractors on one platform, auto payroll, employee self-onboarding, health benefits integration and full-service tax filing and deposits.

Its accounting product connects to its payroll, with payroll journal entries recorded automatically, so a small organization can keep books and payroll with one vendor.

• Best for: very small nonprofits that want payroll and bookkeeping from one US provider.
• Watch out for: Enlisted's data shows no free plan, and grant-level reporting is not a headline feature on the pages checked. Ask for a demo of fund coding.

3. Gusto: best when your accounting software already tracks classes

Gusto is payroll, benefits and HR administration for small US businesses, run as a hosted service. Its nonprofit guide says it handles multi-state tax filing and payments to contractors and staff, and its help center describes mapping Gusto departments or projects to QuickBooks Online classes and to Xero tracking categories. Its pages also list an integration with Aplos and tie it to grant accounting and donor reporting.

That mapping is the useful part for grant reporting: each department's wages, taxes and benefits can post to its own ledger account or class.

• Best for: nonprofits that already use QuickBooks Online, Xero or Aplos and want payroll costs split by program in the ledger.
• Watch out for: the mapping depends on your accounting plan supporting classes or tracking categories. Gusto is paid and US-focused.

4. ADP: best for larger nonprofits with grant-funded staff

ADP provides payroll, HR, time and attendance, benefits and talent services for businesses from small firms to large enterprises. It has a nonprofit page, and ADP's nonprofit materials describe a grant allocation module that reports salary hours and earnings by grant, role and project for its Workforce Now product.

ADP separates payroll for businesses with up to 49 employees from products for midsized and larger organizations, so check which one includes grant allocation for your headcount.

• Best for: nonprofits with dozens of staff, several grants and a need for audit-ready allocation reports.
• Watch out for: sales-led pricing with no published plans, and more setup than a five-person organization needs.

Accounting software that carries the grant coding

Payroll tells you what each person earned. Accounting software shows what each grant and program spent. These tools matter because they decide whether your payroll coding becomes a funder report.

5. QuickBooks: best-known ledger for class-based grant tracking

QuickBooks is Intuit's accounting software family for small businesses, covering bookkeeping, invoicing, payments, payroll and time tracking. Intuit's help pages describe using classes to track income and expenses by program or grant, and assigning a class to an employee so payroll expense follows it.

Class tracking is tied to particular QuickBooks Online plans, so check which tier includes it before you pick one. Browse more in the QuickBooks alternatives guide.

• Best for: nonprofits with an accountant or bookkeeper who already works in QuickBooks.
• Watch out for: class tracking is not on every plan. Payroll is a further product in the QuickBooks family, so check how it is priced and which plans it works with.

6. Xero: best for organizations that share books with an outside accountant

Xero is cloud accounting software for small businesses that connects to your bank, your accountant and other apps. It lists payroll among its extras and has a free trial but no free plan. Gusto's help center describes mapping Gusto projects to Xero tracking categories, which gives you a program-level view of payroll cost.

• Best for: nonprofits whose bookkeeper prefers Xero and who pair it with a separate payroll provider.
• Watch out for: confirm which payroll option Xero offers in your country, because Gusto's mapping applies to US organizations.

7. Zoho Books: best low-cost ledger for tracking funds and donations

Zoho Books is cloud accounting for small businesses covering invoicing, expenses, bank reconciliation, taxes and reports. Its listing names nonprofits tracking funds and donations as a use case and accounting firms serving multiple clients as another. It has a free plan.

The listing does not describe payroll, so pair it with a payroll provider and check how the two exchange data.

• Best for: small nonprofits that need a free or low-cost ledger and run payroll elsewhere.
• Watch out for: it is accounting, not payroll. Verify nonprofit-specific reports on the vendor's site.

8. Wave: best free bookkeeping with a paid payroll subscription

Wave is accounting and invoicing software for small businesses with a free Starter plan, receipt scanning and online payments. Its payroll is a separate monthly subscription for employees and contractors that, according to Wave's support pages, includes direct deposit and automatic filing of state and federal payroll taxes in the US.

So Wave's free tier covers the books, not the paychecks. Compare it with the free accounting software guide.

• Best for: tiny nonprofits that want free bookkeeping and add payroll only when they hire.
• Watch out for: payroll is paid, and Enlisted found no fund or grant accounting features in the listing.

Free and open-source options for nonprofit payroll

Genuinely free payroll is rare. The options below are free in different ways, and each leaves work for you.

9. Homebase: best free scheduling tier for nonprofits with hourly staff

Homebase combines scheduling, time clocks, payroll and hiring for small businesses with hourly teams. Its free Basic plan suits a single location with a small team, and payroll is a paid feature. It is not built for nonprofits, so use it where programs run on hourly staff such as shift-based sites.

• Best for: nonprofits with hourly program staff that need timesheets first.
• Watch out for: it does not carry grant coding in Enlisted's data, and payroll covers the US only.

10. Frappe HR: best open-source payroll for a nonprofit with technical help

Frappe HR is an open-source HR and payroll system covering leave, attendance, expenses and payroll with salary structures, income tax slabs and salary slips. It is GPL-3.0, free to self-host, with managed Frappe Cloud hosting as an option, and the vendor says it supports multiple companies.

Its own site highlights India payroll, and regional tax rules are something you configure. Horilla is similar, with LGPL-2.1 licensing and payroll with tax calculations alongside attendance and leave. A volunteer developer can run either, but a nonprofit needs a payroll specialist to confirm the tax setup.

• Best for: organizations with a technical volunteer, a hosting plan and an accountant who will verify the tax setup.
• Watch out for: you own the server, backups and upgrades, and Enlisted found no US filing support in its description.

Which payroll software should your nonprofit choose?

• Small US nonprofit, grant-funded pay: compare OnPay, Patriot Software and Gusto on how each splits pay by grant.
• Already on QuickBooks or Xero: pick the payroll product that maps to your classes or tracking categories.
• Larger staff and several funders: shortlist ADP and ask for the grant allocation demo.
• Budget is the main constraint: use free bookkeeping, budget for payroll, and avoid self-hosting unless you have technical help.
• Need HR as well: see HR software for nonprofits and accounting software for nonprofits.

For the wider view, read the best HR software guide and browse the HR category and finance category. Accountants who run payroll for nonprofit clients may want the guide to payroll software for accountants.