Payroll services for charities and non-profits

Charity payroll has to satisfy two masters: HMRC, like any employer, and funders or trustees who need salary costs split across restricted funds and projects to the penny.

What makes charities & non-profits payroll different

• Fund and project cost allocation. One employee may be funded 40/35/25 across three grants. The provider’s reporting must split gross pay, employer NI and pension by cost centre, or your management accounts will not reconcile.
• Part-time and term-time staff. Pro-rata holiday (calculator here) and multiple small part-time salaries push per-payslip pricing models above per-employee ones.
• Employment Allowance. Most charities qualify for the £10,500 Employment Allowance against employer NI – check it is being claimed; the employer cost calculator shows the effect.
• Salary sacrifice and pension schemes. Sector schemes (TPT, NEST) and salary-exchange arrangements need correct treatment for both tax and minimum-wage purposes.

What to look for in a provider

Several bureaus specialise in charity payroll with fund-accounting exports. Ask for a sample cost-allocation report and confirm charity-discount pricing – many providers offer 10 to 20 percent off for registered charities.

Pricing follows the wider market – see what outsourcing costs (£4 – £10 per employee per month fully managed) – but sector add-ons matter more than the headline rate, so always compare like-for-like quotes.