Payroll

[Ada676]

I have to pay Musicians (Drummers, Guitarists etc), librarian and vocal scholars. What is everyone doing? Are you paying these people as Independent Contractors or as employees of the church? Thanks for any info!

[NeilZ]

I have to pay Musicians (Drummers, Guitarists etc), librarian and vocal scholars. What is everyone doing? Are you paying these people as Independent Contractors or as employees of the church? Thanks for any info!

If they are not employees, that is, you are not deducting Income Taxes, and paying employer SS & Medicare, then they are Independent Contractors and should be issued a 1099 at the end of the year.

Then it is on them to take care of their own income and SECA taxes.

[beas]

We always treat them as independent contractors since they are not normally employed by the church except for the special occasions for which they are hired.

[Ada676]

Thanks for the info!

[JohnDMeyers]

I will post here the IRS questionnaire for determining if a person can be considered an employee (W2) or contractor (1099). We use this when making our determination.

The following is a list of 20 questions the IRS uses to determine if a worker is an independent contractor or employee. The answer of yes to any
one of the questions (except #16) may mean the worker is an employee.

1. Is the worker required to comply with instructions about when, where and how the work is done?
2. Is the worker provided training that would enable him/her to perform a job in a particular method or manner?
3. Are the services provided by the worker an integral part of the business’ operations?
4. Must the services be rendered personally?
5. Does the business hire, supervise, or pay assistants to help the worker on the job?
6. Is there a continuing relationship between the worker and the person for whom the services are performed?
7. Does the recipient of the services set the work schedule?
8. Is the worker required to devote his/her full time to the person he/she performs services for?
9. Is the work performed at the place of business of the company or at specific places set by the company?
10. Does the recipient of the services direct the sequence in which the work must be done?
11. Are regular oral or written reports required to be submitted by the worker?
12. Is the method of payment hourly, weekly, monthly (as opposed to commission or by the job?)
13. Are business and/or traveling expenses reimbursed?
14. Does the company furnish tools and materials used by the worker?
15. Has the worker failed to invest in equipment or facilities used to provide the services?
16. Does the arrangement put the person in a position or realizing either a profit or loss on the work?
17. Does the worker perform services exclusively for the company rather than working for a number of companies at the same time?
18. Does the worker in fact make his/her services regularly available to the general public?
19. Is the worker subject to dismissal for reasons other than non-performance of the contract specifications?
20. Can the worker terminate his/her relationship without incurring a liability for failure to complete the job?

[Ada676]

Thanks John!

[debbieg]

I have to pay Musicians (Drummers, Guitarists etc), librarian and vocal scholars. What is everyone doing? Are you paying these people as Independent Contractors or as employees of the church? Thanks for any info!

Are you referring to musicians that play every week or the occasional guest performer?
We pay our pianist and organist as employees and withhold social security taxes. If, once in awhile, we are left stranded and need to have someone come play just for a single week, we just pay them a flat fee as a contractor.

[NeilZ]

I have to pay Musicians (Drummers, Guitarists etc), librarian and vocal scholars. What is everyone doing? Are you paying these people as Independent Contractors or as employees of the church? Thanks for any info!

Are you referring to musicians that play every week or the occasional guest performer?
We pay our pianist and organist as employees and withhold social security taxes. If, once in awhile, we are left stranded and need to have someone come play just for a single week, we just pay them a flat fee as a contractor.

Debbie,

in this scenario ... the regular pianist & organist are indeed, employees. That said, you should also be withholding Federal & State income taxes.

The occasional musician is a 1099 contractor.

[debbieg]

Neil...because the amount that they earn is so small, they elect not to have any federal or state tax withheld. They understand that they are still responsible for meeting withholding requirements through their other (secular) paychecks. they still get W-2s but there is just no tax to report.

Debbie

[NeilZ]

Neil...because the amount that they earn is so small, they elect not to have any federal or state tax withheld. They understand that they are still responsible for meeting withholding requirements through their other (secular) paychecks. they still get W-2s but there is just no tax to report.

Debbie

FWIW ... I would definitely have some W-4s in your files showing that they are claiming enough exceptions to not qualify for withholding, as I don't believe you have a choice not to withhold taxes. I would have to look at IRS Pub 15 to be sure.