User Support Forum

Our pastor has retired; and the last day is mid-month.

They have part-time status and have been paid via housing allowance instead of a salary.

I'm a new treasurer and I don't understand how to calculate the pastor's final payment; given that most of the pay is designated to the housing allowance. So if I calculate for 3 Sundays out of 5 for the month; it isn't clear how to calculate the social security offset etc.

I took the gross salary and divided it by the number of Sundays in January (5) and the pay period for payment covers (3) Sundays. But by doing this; the social security offset, retirement allocation are not recalculated to reflect the revised gross housing allowance pay.

I know this sounds crazy -- but it's what I inherited.

Tracilizz wrote:Our pastor has retired; and the last day is mid-month.

They have part-time status and have been paid via housing allowance instead of a salary.

I'm a new treasurer and I don't understand how to calculate the pastor's final payment; given that most of the pay is designated to the housing allowance. So if I calculate for 3 Sundays out of 5 for the month; it isn't clear how to calculate the social security offset etc.

I took the gross salary and divided it by the number of Sundays in January (5) and the pay period for payment covers (3) Sundays. But by doing this; the social security offset, retirement allocation are not recalculated to reflect the revised gross housing allowance pay.

I know this sounds crazy -- but it's what I inherited.

No its not crazy, as both those amounts are usually manually entered.

The SS Offset is normally the amount that is paid by the employer for most employees. Normally is 7.65% of the effective salary, which is any actual salary and housing allowance, this normally is part of the standard 'terms of call' that must be approved by the congregation in many churches. For example, the budget may be 8100 a year, so the person who does payroll, will take that amount, and divide it by 12 or 24 depending on the number of paydays per month and enter that amount in the Pay Item for the SS offset.

What I would do here is take the amount you calculated for the 3 Sundays, and muliply by 7.65% to get the amount of the offset.

The retirement allocation is another item that may be part of any terms of call and budgeted yearly. The calculation for each paycheck is made much like that of the SS offset. In this case I would divide the amount normally budgeted for the year, divide by 12, then divide by 5, and multiply the result by 3. That will give you the the amount for the retirement, using the example amount of 8100, this calculates as $405.00.