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NPO Characteristics
Board Development
Tax Exemption
Staff Recruitment
Establishing a Nonprofit Organization

Establish a payroll system and procure necessary insurance coverage

You will need to make payroll arrangements to compensate your full time and part time staff, as well as independent contractors. It is important to distinguish the role of independent contractors from that of part time staff. Independent contractors are hired to perform very specialized, short-term projects for the organization (i.e. accountants, lawyers, consultants), whereas part time staff are permanent or long-term employees of the organization.

Funds that are earmarked for payroll tax must never be used for any other purpose. Be very careful, since committing such an error may result in substantial penalties from the Internal Revenue Service. In addition to salary, benefits are an important part of the compensation package, and your state government will insist that you have certain coverages. These ordinarily include workers' compensation and disability insurance.

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