Celebrating 20 Years in Business • 2004 - 2024

Nonprofits Run Payroll, Too

By nature, nonprofits operate with the selfless assistance of volunteers. However, what if we told you that nonprofits also have paid employees who rely on regularly scheduled paydays?

Nonprofits face payroll challenges similar to those of for-profit businesses

Just like for-profit businesses, nonprofits have to learn how to accurately withhold payroll taxes on behalf of their employees. But because they are nonprofits, they are required to work within tight and limited budgets while determining reasonable executive compensation for each employee.

Interestingly enough, many people believe a common misconception that suggests nonprofits do not have to pay their employees, which would mean they don’t have to run payroll or withhold taxes. However, that’s not entirely true. If a nonprofit employs staff members who are classified as employees, they are subject to the same payroll taxes as for-profit firms.

What types of taxes do nonprofits have to pay?

Nonprofits are required to pay the Federal Insurance Contributions Act (FICA) tax. They fulfill this responsibility by withholding federal income taxes — as well as Social Security and Medicare — from the paychecks of their employees. Nonprofits are also required to match the contributions their employees make toward Social Security and Medicare.

When it comes to 501(c)(3) organizations, they are not liable for Federal Unemployment Tax Act (FUTA) taxes. That said, nonprofits that do not fit this particular classification are liable. Furthermore, nonprofit organizations must pay applicable state and local taxes. One example of this type of tax is the State Unemployment Tax Act (SUTA).

While there are certain exemptions that charitable nonprofits are eligible for, it’s imperative that you check the city and state tax requirements in your area. Also, in some cases, quarterly SUTA tax payments can be dispensed with in favor of directly paying the state for unemployment benefits regarding former employees.

Of course, keep in mind that there are different kinds of nonprofits, with subtle but important differences. Be sure to work with professionals to understand what laws and regulations apply to yours.

How should nonprofits deal with volunteer workers?

If taxable gifts are offered to volunteers in exchange for their work, then taxes must be withheld from the monetary gift just like they would be for payroll on behalf of employees. Volunteers are required to report the value of the gifts as being taxable income when submitting their tax information to the IRS.

What about grants that nonprofits receive?

Nonprofits might receive grants from foundations. The intention behind the grants is for the nonprofits to use said grants for specific projects that are designed to further the mission of the nonprofit. Grants can also be used to cover payroll costs associated with employees whose work-related duties support the progression of the project.

Also, while carrying out projects funded by grants, it is important to track the amount of time that people within the nonprofit allocate toward the project. If you need help doing so, consider utilizing a mobile app that can capture the number of hours spent on the project. Then, make sure the hours being tracked in real time connect directly to a payroll application for recordkeeping purposes.

IRS rules are in effect

In the eyes of the IRS, nonprofit officers and directors must meet specific requirements for reasonable compensation. This must account for total compensation, including wages, fringe benefits, and paid time off.

Professional development costs, bonuses, and health insurance are part of this as well, if applicable. To stay on top of the value of everyone’s total compensation, nonprofits should regularly review the salaries of their employees. This will help ensure that they uphold total compliance with the IRS’ rules.

Payroll taxes that are withheld by nonprofits need to be submitted to the IRS. However, they won’t be automatically transferred when they are withheld by the nonprofits. Instead, payroll taxes are recognized as business liabilities until the deadline by which the nonprofit must transfer the funds.

To assist you and your nonprofit with payroll processing, consider opting in to an accredited payroll service. Another option is to implement HR software. For the greatest peace of mind, hire an accountant instead.

Third-party services with experience in the world of nonprofits can ensure that your nonprofit is entirely tax-compliant. Just keep in mind that payroll services can be expensive. Most of them are priced in ways where you have to pay a flat-rate monthly fee in addition to a per-employee monthly fee.

Since many nonprofits are operating within limited budgets, it’s typically easier to establish an in-house payroll process instead. If this is what you decide to do within your nonprofit, make sure nobody has isolated access to payroll-related information. Whenever someone is entering, approving, or processing payroll, a second person must be present to verify the payroll data prior to processing and issuing checks or direct deposits. This is necessary for security reasons.

When it comes to payroll for nonprofits, one of the most challenging aspects is learning how to balance budgets while maintaining payroll compliance. This can help your nonprofit simultaneously minimize penalties and save money.

If you decide to use a third-party payroll platform, it’s wise to ensure that the platform works with your existing bookkeeping and time-tracking software. Also, double-check that it updates alongside tax laws and regulations as they change.


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Emily Gooding

Payroll Specialist

Emily is graduating in May with a BA in Business Administration from Lander University. She has gained valuable experience as a payroll intern for BMW. We are so excited to have her on the team and  to see her excel in her role as a Payroll Specialist.

Madison Capps​

Payroll Specialist

Madison received a BS in Psychology from Southern Illinois University in 2019. Since then, she has been working as a supervisor at Starbucks and earning her second degree, a BA in Administration and Accounting, from USC Aiken in the fall. She will be joining us as a Payroll Specialist and a valuable addition to our Paysmart team.

Kristen Wilby

Payroll Specialist

Before moving to South Carolina with her husband, Kristen worked as a Sales & Marketing Specialist for Premium King in Feasterville, PA, where she gained valuable experience in strengthening the brand and generating new business. Kristen also brings to our team several years of professional experience as an Executive Assistant and as an Office Manager, where she was first introduced to payroll. Kristen’s knowledge and her innate ability to establish genuine relationships contribute greatly to the team as we continue to grow and serve our clients.

Meg Whitaker

Payroll Specialist

Meg brings nearly twenty years of professional experience to the team. Most recently, she worked as a Payroll & Benefits Specialist in Centennial, Colorado. She and her husband recently moved back to the Carolinas for his job, and we were fortunate to find her! Before Colorado, Meg worked at CPI Security Systems in Charlotte, NC, for twelve years as a Billing Coordinator and Senior Administrative Assistant. She also gained three years of experience as an HR Assistant for a law firm in Fayetteville, NC. Her expertise significantly adds to our team and benefits our clients as we continue to grow!

Rachel McClaran, EA


Rachel plays a crucial role in developing Paysmart’s core processes and procedures, as well as overall strategy within the company. Rachel graduated from Bob Jones University and is an active member of the Junior League of Greenville and the South Carolina Association of CPAs. Her desire to serve her community has led her to become involved with several nonprofit organizations and to serve as the past Vice President of Finance for the Junior League of Greenville. Outside of the office,Rachel enjoys spending time on the water and traveling with her husband and their two children.

Hina Rogers

Payroll Specialist

Hina joined the Paysmart team in August 2022. She grew up in Portland, Oregon, before moving to Greenville, SC. She earned both a bachelor’s and a master’s degree in education. After college, she represented her alma mater as an enrollment counselor in the Southeast and Western states. She enjoys traveling, road trips, cooking, and quality time with her family. Hina looks forward to serving your company’s needs! 

Sharon Quantrille

Payroll Specialist

Sharon has spent several years in the accounting industry and has completed courses to hone her skills as a Payroll Specialist. Her background as an educator, professional musician, and Human Resources Generalist has contributed to her communication skills, commitment to professionalism, and organizational skills that make her a tremendous benefit to her Paysmart clients and colleagues. A graduate of Bob Jones University with a B.S. degree in Music Education, a Master of Music degree in Piano Performance and a Human Resources Generalist Certificate, Sharon spends her free time gardening, hiking, playing the piano, and spending time with her four adult children.

Haleigh Bates

Payroll Specialist

Haleigh joined our team in May of 2022 as a payroll specialist. Haleigh has over eight years of experience helping personal and small business clients with their financial needs. She received her Bachelor’s Degree from Georgia Southern University. She enjoys spending time with her husband and their three children, Caden, Addie, and Mason.  She likes to go hiking, spend time at the beach, and volunteer at her church in the children’s ministry. 

Courtney Rossello

Payroll Tax Manager

Courtney joined the team at Paysmart Payroll Services in September 2020.  She was raised in Simpsonville, SC, and graduated from Clemson University in 2009 with a bachelor’s degree in political science and a concentration in public administration.  Courtney began her payroll career in 2011 and currently works in the payroll tax department at Paysmart.  She strives to make every client feel comfortable knowing their payroll taxes and tax returns are handled accurately and efficiently.  Courtney is also a volunteer Treasurer for a local middle school in Greenville County.  In her spare time, she enjoys volunteering with special needs children, road trips, and spending time with her two daughters. 

Emily Hargrave

Senior Payroll Specialist

Emily received her bachelor’s degree in music from West Coast Baptist College. Since her college days, Emily has gained nearly 18 years of experience in office operations and project management. Emily joined Paysmart in 2017 and enjoys using her skills to support clients and the Paysmart team.

 At heart, Emily is a small-town country girl from the Midwest but is happy now to call the Upstate home, where she doesn’t have to endure harsh winters. Emily’s favorite ways to spend her free time are reading a good book, challenging herself with puzzles, and doing her best not to kill the plants in her garden.

Julie Shull

Client Success Specialist

Julie is the Client Success Specialist for Paysmart Payroll.  She joined the team as a Payroll Specialist in March of 2020. She received her Bachelor of Science degree from NC State University and earned an MBA from Gardner-Webb University while playing on the GWU women’s tennis team. After starting her career with Wilson Sporting Goods as a Financial Analyst, she took a few years off to raise twin boys until she began working for Greenville County Schools in 2014.  Julie enjoys spending time with her family and outdoor activities.

Brad Detandt

Payroll Administrator

A graduate of Northland International University with a BA in Counseling, Brad Detandt leads the day-to-day operations of the Paysmart team. He is eager to grow the firm’s client portfolio. He brings a diverse employment background in retail, manufacturing, nonprofit ministries, and business development, with
a specialized focus on team development and process improvement. Brad’s professional – and personal – mission is to “Be Great. Serve!” Brad enjoys spontaneous activities and weekend trips to state parks with his wife Miranda and his three children.

Stephen C. Stokes

Managing Partner

Stephen has more than 14 years’ experience working with individuals and businesses to meet their tax, accounting, and payroll needs. He has been the managing partner of Paysmart Payroll Services since January 2009. He is a licensed certified public accountant in South Carolina and Georgia. Stephen is also a member of the South Carolina Association of CPAs, the Georgia Society of CPAs, the American Institute of CPAs, and the Professional Association of Small Business Accountants. He has a bachelor’s degree from Bob Jones University and a master’s degree from Georgia State University. Stephen was born and raised near Atlanta, Georgia and moved to Greenville, South Carolina, several years ago. He enjoys spending time with his wife, Tiffani, and daughters, Madeline and Julianna. He is actively involved in his church and enjoys reading, sports, and other outdoor activities.