Payroll for pastors

[pessner]

Do you pay the pastor(s) in the Payroll software or accounts payable? (1099s issued, no W-2s

Pat Essner
KUBC
Woodland MI

[NeilZ]

Do you pay the pastor(s) in the Payroll software or accounts payable? (1099s issued, no W-2s

Pat Essner
KUBC
Woodland MI

If you're just issuing a 1099, I'd say that would happen in Accounts Payable since the pastor is evidently acting as a Private Contractor, not an employee of the church.

They have to handle their own taxes (Withholding, and any SS/Medicare) themselves.

My thoughts here on covering any Worker's Compensation or unemployment insurance: the church should not cover them as they are not acting as employees. Again, that's my personal opinion. I'd talk to a lawyer that is conversant in labor law to be sure to do the correct thing on that.

[beas]

Just a note of caution in how you pay pastors. Do they only work for one church? If so, they are highly likely to be considered by the IRS as employees for Federal Withholding Tax and as self-employed for FICA and MC. As employees, they would need to have a W-2 issued, not a 1099.You should consult an attorney or CPA who is familiar with clergy compensation. IRC Section 3121 and 1402 may be helpful. Also, if they are employees, they don't have to have you withhold FWT, but they can choose to. State withholding may be different depending on the state. However, I think many of them follow the federal guidelines.

So, if you're paying them as employees, it can be done through the payroll module. PC+'s payroll is set up for this.

[NeilZ]

Just a note of caution in how you pay pastors. Do they only work for one church? If so, they are highly likely to be considered by the IRS as employees for Federal Withholding Tax and as self-employed for FICA and MC. As employees, they would need to have a W-2 issued, not a 1099.You should consult an attorney or CPA who is familiar with clergy compensation. IRC Section 3121 and 1402 may be helpful. Also, if they are employees, they don't have to have you withhold FWT, but they can choose to. State withholding may be different depending on the state. However, I think many of them follow the federal guidelines.

So, if you're paying them as employees, it can be done through the payroll module. PC+'s payroll is set up for this.

I agree ... but he specifically asked about 1099s, so the AP module is setup for that, Payroll does not give the option to print those.

[pessner]

Thank you - very helpful.