5 Top Church Payroll Services: What You Need to Look For

It’s easy to use and handles tax filings for you, and the price is reasonable when compared to other church payroll services. SurePayroll by Paychex is optimal for small churches looking for budget-friendly and flexible pay processing options. It offers a full-service payroll package (costing $39 plus $7 per employee monthly) with access to employee benefits plans and automatic tax payments and filings.

Top Church Payroll Services: What You Need to Look For

Or perhaps you want to learn how to correctly file W-2s and 1099s for your church. In that case, the W-2 and 1099 applet in our Management Suite will give you step-by-step instructions on how to e-file the informational returns for your church. church payroll Many church leaders mistakenly believe that this decision is up to their discretion.

What Makes Church Payroll Different?

Unlike for-profit businesses, however, you’re not required to pay the Federal Unemployment Tax Act (FUTA) tax or state unemployment tax. Book a call with one of our experts today to start a conversation about getting your church’s payroll tax compliant. Churches must file Form 941 quarterly to report how much federal income, Social Security, and Medicare tax they’ve withheld from staff paychecks. retained earnings But if you want that $5,000 to be your “net check” to the employee, you’ll need to “gross up” so they receive the full $5,000 while you withhold the correct taxes.

Financial Resources for Clergy Pricing

Simplify your payroll with user-friendly software built for your faith-based organization’s complex needs. For example, your church purchases a new computer and decides to give the Pastor the old one. This is fine if… the fair market value of that church owned property is recorded as taxable income for your Pastor. Ok…climbing off my soapbox and resuming discussion on properly managing payroll…

• If you’re looking for an integrated HR solution, be sure to take that into account as you research your options.
• Churches are also required to withhold and pay these taxes on behalf of their employees.
• You can also run payroll and pull reports on your contributions and accounts payable throughout the fiscal year.
• Housing allowances for ministers also have to be properly accounted for in payroll.

However, specialized software and training can help address these unique challenges and achieve more effective church payroll management. Churches and religious organizations are generally exempt from paying Social Security (FICA) and Medicare (Medicare) taxes for their clergy members, including pastors, ministers, priests, and other religious leaders. Clergy members are typically considered self-employed for Social Security and Medicare tax purposes, which means they are responsible for paying both the employer and employee portions of these taxes themselves.

Institutional finances and spending should be transparent so that management, employees, and those served can see how resources and money are being justly and wisely employed to accomplish the mission. A tendency to secrecy in such matters or a feeling of shame in being transparent can be strong indicators of present injustice. Committees and councils should make correcting injustices a regular agenda item and be willing to contact other dioceses, parishes, and institutions to see how they have done better. Yearly cost of living increases should be the norm and not the exception. Certainly, undertakings of this magnitude can seem burdensome or nearly impossible for a Church that, as pastoral workers often joke, moves at a glacial pace. Families register at a parish, pledging to go to Mass every Sunday and participate in the life of the community.

• However, users appreciate that its software is easy to use and its dedicated payroll specialists are responsive and helpful.
• One of the tasks that you are likely to struggle with is expense tracking.
• When it comes to your church’s payroll, you can take a deep breath knowing that the IRS must now follow a strict procedure before being able to request information about your church’s employment tax documents.
• You also can’t create custom reports directly from its system like you can with Gusto and Payroll in QuickBooks.
• However, some customers have complained that, although the company’s customer service agents are kind, the wait time to chat or contact with someone may be lengthy at times.
• One of the main reasons this is true is because of how ministers are treated for tax purposes.

And the best church accounting software helps you create positive experiences for your employees with benefits management and paid time off tracking. OnPay is an online payroll service that offers solutions for payroll processing, HR, and benefits management. It aims to simplify these processes with features like automatic tax calculations, payroll setup, data migration, and integration with various business applications such as Partnership Accounting QuickBooks and Xero. Not only do you have to figure out how to calculate wages and withholdings, but you also have to stay compliant with federal and state laws and exemptions.