When I became a church treasurer, the scariest part of the job was payroll. I was a CPA. I worked as an auditor for the State of North Dakotas. I knew about taxes and payroll liabilities and all that fun stuff, but I’d never actually cut a payroll check before. To make matters worse, no university trains people on clergy taxes. I was completely unprepared for cutting my pastors paycheck.
I’m not alone. I’ve helped train in numerous church treasurers and this is almost always the biggest concern. What I’ve found out is that cutting a paycheck for your pastor is less complex than cutting a paycheck for a lay employee. You need to understand the Housing Exclusion and how your payroll software (if you use any) handles that. Once you get that, it’s smooth sailing…no FICA…usually no Federal Income Tax Withholding.
Check out the video below:
Useful Links
- W2 and Pastor’s Salary Guide: https://www.dakotasumc.org/media/files/old/00/Conference/Finance/Legal/w2_Pastor_pay_worksheet.pdf
- Pastor Payroll Worksheet (PDF): https://www.dakotasumc.org/media/files/old/00/Conference/Finance/Legal/Pastor_Payroll_Worksheet.pdf
- Pastor Payroll Worksheet (Excel): https://www.dakotasumc.org/media/files/old/00/Conference/Finance/Legal/Pastor_Payroll_Worksheet.xlsx
JCT Accounting Co 