If you’re running a nonprofit, you already know that passion fuels the mission, but it also comes with some tricky wage and hour challenges that can cause real problems if they’re not handled the right way.
That’s why it’s worth taking a closer look at some of the common HR and payroll issues nonprofits deal with. And if you’re not sure how a digital payroll system could help manage those tasks more smoothly, we’ll give you a quick overview of what it can do.
Paying Employees with Different Funding Sources
If your organization uses grants or donations to pay staff, you can’t just hit “run payroll” every two weeks and call it a day. You need to show where each dollar goes, especially when that money came from a grant. Instead of tracking it all by hand, the right payroll system can automatically split wages by funding source, so it’s easy to see who’s being paid from which pot of money. It also makes grant reporting faster and keeps you ready for audits.
Managing High Turnover and Seasonal Staff
Lots of nonprofits rely on part-time or seasonal workers for summer programs, fundraisers, or holiday help. But constantly setting up payroll for newly hired people can feel like a full-time job by itself, so a digital payroll system with simple hiring tools can really help. New team members can fill out forms and set up direct deposit online before their first day. You’ll spend far less time on paperwork, and automated payroll taxes mean fewer headaches (and no missed deadlines).
Staying One Step Ahead of Labor Law Changes
People who work for nonprofits are admirably dedicated to what they do, so it’s not surprising that many go above and beyond by working extra hours without even thinking about it. But if those hours aren’t tracked and paid correctly, it can cause serious problems for your organization. Using a time-tracking tool that’s built into your payroll system helps ensure every hour is logged and paid correctly. It also helps you stay compliant with labor laws and makes it easier to catch small issues before they turn into bigger problems.
Making Sure Everyone Is Properly Classified
When you’ve got a mix of employees, contractors, interns, and volunteers, it’s not always clear how each person should be classified. But getting it wrong, like treating a contractor as an employee, can lead to fines or back taxes. That’s why it helps to have clear role definitions and a system that keeps everything organized. And if you’re ever unsure, it’s always wise to ask an HR expert before payday.
Offering Benefits Without Breaking the Bank
You may not be able to offer big corporate salaries, but that doesn’t mean you can’t be competitive. A lot people choose to work in nonprofits because the mission is their primary focus, and meaningful, affordable benefits can go a long way in keeping great people around. Consider benefits like group health plans through associations, simple retirement plan options, or even low-cost perks like training stipends or flexible schedules. A good payroll and HR system can help manage these benefits easily, without adding extra work for you or your staff.
Commonwealth Payroll & HR Understands Nonprofits
At Commonwealth Payroll & HR, we work with many nonprofits and understand how much is being asked of small teams with big responsibilities. If you’re curious to see how a payroll and HR platform tailored to nonprofit needs actually works, we’d be happy to walk you through it and show you what it looks like. No pressure, just a helpful conversation.
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