<aside> 💡

~This page is WIP - Burton, 3/6/25

</aside>

Becoming an Employer

Recommended Payroll Service Provider

• A payroll service provider will handle onboarding employees, collecting income and employer tax withholdings, paying out withholdings to state and federal tax collection agencies, and quarterly tax filing compliance. These services are well worth the cost of the payroll processing fees.
• Sutro Li recommends Gusto for early stage non-profits.

Links - Gusto

Key Considerations for Becoming an Employer

As you begin to grow your nonprofit organization and take on employees, there are several essential steps and considerations to ensure that you're compliant with employment laws and are offering a supportive, professional environment for your team. This section outlines the key steps and best practices for new nonprofit employers.

1. State Registration for Income Tax Withholding

• What You Need to Know: As an employer, you are required to withhold state income taxes from your employees' wages. To do this, you need to register your nonprofit with the state(s) where you have employees. Each state has different requirements, so be sure to register with your state's Department of Revenue or Employment Department.Action Steps:
  • Register your organization with the state where you have employees.
  • Apply for an Employer Identification Number (EIN) if you haven't already.
  • Set up a payroll system to properly withhold and remit state taxes.

2. Employee Handbook

• What is it? An employee handbook is a foundational document that communicates your organization's policies, expectations, and culture to your team. A well-crafted employee handbook can help minimize misunderstandings and set clear expectations from the start.
• What to Include: Your employee handbook should cover the following key areas:
  • Benefits: Detailed information on health insurance, retirement plans, and any other benefits offered.
  • Policies: Include company policies on dress code, workplace behavior, and disciplinary procedures.
  • Attendance: Define expectations for punctuality, sick leave, and absence reporting.
  • Work from Home (if applicable): Set clear expectations for remote work, including work hours, communication protocols, and performance metrics.
  • Mission and Values: Share the mission and values of your nonprofit to help employees understand the bigger picture and their role in it.