What reports do the church need to file with the government regarding my compensation?

A church files the same reports for all employees and is subject to the same withholding rules for standard employees as any other organization. The only exceptions relate to the exemption from unemployment taxes that all churches enjoy and to an exemption from FICA tax that a few churches applied for in the 1980s. IRS Publication 15 can answer treasurers’ standard questions regarding church payroll.

Reporting a minister’s compensation is often confusing even to treasurers who are familiar with the rules for standard employees. Following is a sample compensation arrangement for Pastor Mike Minister of Sample Church. Quarterly amounts are presented below. Pictures of IRS Forms 941, W-2, and W-3 are provided. The forms have been prepared assuming that the church also has a part-time office worker, Susan Secretary, who works too few hours to be eligible for any benefits other than an hourly wage with 7.65 percent FICA withholding (and an equal amount of FICA matching by the church).

Sample minister compenstation

Sample employee compenstation

Sample W-2

Sample W-2

Sample W-3

Sample 941

 

This information is provided as a service of MinistryCPA.org to ministers and Christian ministries. Please contact us or your personal professional advisor to determine how this information may apply to your own situation.