Managed Payroll · Nonprofit Organizations
501(c)(3) payroll has its own set of traps: grant-restricted fund allocation, volunteer vs. employee misclassification exposure, executive compensation that must be publicly disclosed on Form 990, and multi-program coding across every funding source. We manage all of it at $25-$45 per employee per month, inside your existing system.
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Bottom line: Nonprofit payroll is not just regular payroll with a tax exemption attached. Grant-restricted funds need program-level cost coding, volunteers who also draw a paycheck create wage-claim risk, and executive compensation lands on a publicly filed Form 990. BEG runs nonprofit payroll at $25-$45 PEPM, all-inclusive, in your existing system, live in 3-5 business days.
Why Nonprofit Payroll Is Different
A 501(c)(3)'s tax exemption covers the organization's income, not its payroll obligations. Grant fund coding, volunteer misclassification risk, and public compensation disclosure create nonprofit-specific payroll exposure that standard business payroll setups do not handle.
Who We Manage Payroll For
BEG manages payroll for every role type a 501(c)(3) employs: executive staff subject to Form 990 disclosure, program staff coded to specific grants, part-time and seasonal workers, and multi-program or multi-location organizations under one engagement.
Compensation structured and documented for accurate Form 990 reporting, including base pay, bonuses, and reportable benefits that must be disclosed publicly.
Salaries coded to the correct program or grant, with labor allocation categories configured so time-and-effort documentation is ready for funder and single-audit review.
Fundraising event staff, seasonal program workers, and part-time support staff processed correctly with appropriate new hire reporting and unemployment insurance treatment.
Organizations running multiple programs, chapters, or physical locations managed under one unified payroll engagement with program-level cost reporting.
How It Works
A scope review maps your programs, grants, and staff roster, then we configure grant-level labor coding and unemployment insurance treatment in your existing system before running your first live payroll.
We map your programs, active grants, executive compensation structure, and unemployment insurance election status. You get a fixed monthly cost before we start.
We configure grant-level labor allocation coding, Form 990 compensation reporting categories, and volunteer-vs-employee role documentation. No migration required.
Every pay cycle, every grant allocation report, every state filing, and every year-end W-2 fully managed by BEG. Your board approves compensation, we process everything else.
What You Get
Common objection: "We are on a tight budget and cannot disrupt the system our bookkeeper already knows."
BEG operates as your managed payroll team inside your current system, whatever it is. If you want to move to isolved for a platform that handles grant-fund coding and multi-program allocation natively, we can manage that transition, but it is never a requirement.
Common objection: "Our funders want to see exactly what payroll administration costs against each grant, and add-on fees make that messy."
The $25-$45 PEPM rate covers everything: grant fund allocation, Form 990 compensation data prep, state filings, year-end W-2s, and BEG support. One predictable number your finance committee and funders can both understand.
Common objection: "We call our payroll company and they have never heard of a single audit or a Form 990."
Your BEG payroll specialist is your ongoing contact, not a call center that has to look up what grant-restricted funding means. When your finance committee needs a grant allocation report, or you add a new program, one message to your BEG contact gets it handled.
Getting Started
From scope review to your first live pay cycle takes 3-5 business days, including grant-level labor coding setup and a review of your unemployment insurance election.
15 minutes. We map your programs, grants, executive compensation structure, and unemployment insurance status, and give you a fixed monthly price.
Agreement signed, system access granted, grant and program list confirmed, current-year Form 990 compensation categories reviewed.
Grant-level labor allocation coding, volunteer vs. employee role documentation, and unemployment insurance treatment configured in your existing system.
Your first fully managed nonprofit pay run. BEG executes, your board approves compensation, we handle everything else.
The Math on Waiting
Nonprofits that spend $1,000,000 or more in federal awards in a fiscal year are subject to a single audit under 2 CFR Part 200, and payroll cost allocation is consistently one of the areas auditors flag. A finding can mean disallowed costs, corrective action plans, and funder scrutiny on your next grant cycle. Managed payroll includes labor allocation coding built for audit review from day one.
Your Next Filing Window
Form 990 compensation disclosures pull directly from your payroll records. Transitions typically take 30-60 days. Starting the scope review now means clean, correctly-coded compensation data ready well before your filing deadline, not a scramble the week it is due.
15 minutes. We scope your programs, grants, and compensation reporting needs, and give you a fixed monthly cost.
FAQ
No. A 501(c)(3) organization's federal income tax exemption does not extend to its employees. Wages are subject to the same federal income tax withholding, Social Security, and Medicare rules as any other employer, with narrow exceptions like qualifying student workers.
It is legally risky and heavily scrutinized. The Department of Labor looks at whether the person performs the same duties in both roles and whether the "volunteer" hours are effectively unpaid work for the same job. We flag these situations during scope review before they become a wage claim.
We configure your payroll system with labor allocation categories that map to each grant or program, so every pay run distributes salary and burden costs to the correct funding source automatically, with documentation ready for your grant reporting and single audit if required.
Yes. Form 990 requires reporting compensation for officers, directors, trustees, key employees, and the five highest-compensated employees above $100,000, and the return is a public document. We format payroll data so your compensation reporting is accurate and ready before filing season.
Most are not automatically exempt from state unemployment tax, though nonprofits can elect the reimbursable method under federal law instead of paying standard SUTA, reimbursing the state only for actual claims paid. We help you evaluate which method costs less for your organization.
No. BEG operates as your managed payroll team inside your existing system. Migration to isolved is available if you want a more capable platform, but it is never a requirement to start.
Everything: multi-program payroll coding, grant fund allocation, unemployment insurance method review, Form 990 compensation data prep, state filings, year-end W-2s, and a dedicated BEG contact.
From signed agreement to live payroll: 3-5 business days. We map your programs and grants, configure labor allocation categories, and review your current unemployment insurance election before your first managed pay cycle.
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Running payroll for a church or other faith-based organization specifically? See managed payroll for churches or see all managed payroll services.
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