Payment of Events via Payroll

[angel1]

Hello,

We are using Powerchurch 11.55. We allow our facilities (Family Life Center and Fellowship Hall) to be used by the community for a fee. Our custodians are paid and we run this through payroll. How do I figure the tax on the amount paid (normal fee is $75.00), both custodians have an additional withholding of $20.00 for their normal pay checks, but don't want the additional withholding taken from the event fee, as this will sometimes leave a check of a very small amount. What should I do, so that I can let the Treasurer know how to process this?


angel1

[NeilZ]

Hello,

We are using Powerchurch 11.55. We allow our facilities (Family Life Center and Fellowship Hall) to be used by the community for a fee. Our custodians are paid and we run this through payroll. How do I figure the tax on the amount paid (normal fee is $75.00), both custodians have an additional withholding of $20.00 for their normal pay checks, but don't want the additional withholding taken from the event fee, as this will sometimes leave a check of a very small amount. What should I do, so that I can let the Treasurer know how to process this?


angel1

I don't think there is much you CAN do, these fees are income, and as such, must be taxed appropriately, otherwise you're violating withholding tax laws. As far as the additional withholding, that is a voluntary action by the employees, and has no bearing on whether or not these fees are taxed. As the employer, you have NO leeway. I would just roll the fees into their normal salary as an additional income item.

[Jeff]

Do you process these payments as separate checks? Or are they included as an additional income with their regular paychecks?

[wms7328]

I'm assuming in my answer that you have the tax withholding set up per the tax tables and then a separate payroll item set up to deduct the additional amount that the employee has indicated. You can elect to not process that one item when you process a payroll check for an individual. When you get the verify payroll screen, click on Check Details at bottom left of screen and it will take you to a screen with each payroll item listed for that employee. Usually all the items will be selected as indicated by check in box on left. If you uncheck an item, it won't be used in that check calculation, so if you uncheck the additional withholding allowance, you should see the check amount increase.

You have to deduct taxes, FICA as specified by the IRS every time you pay someone any amount connected with their employment. However, I do believe you could elect not to process the additional withholding for a smaller check, but you should verify that with your accountant.

I've found that the best way to handle this is to simply include these additional payments in the normal paycheck on whatever frequency you pay the individual. That way you don't have to remember to change anything, just set up an additional payroll item for these events as a salary item and then you can enter the amount at the time you process the normal payroll.