how do small churches handle payroll

Keep in mind that your church should not withhold the social security and Medicare tax (self-employment tax) from ministers unless there is a voluntary withholding agreement. Clergy employees are different because of their dual tax status (SECA vs. FICA taxes). You can expect to wait a bit longer to get a hold of a customer service representative at QuickBooks. Still, the platform remains user-friendly, and church payroll processing is a breeze. Employee benefit features include pay-as-you-go employee compensation and a clergy housing allowance. MinistryWorks also includes health care reports, employee eligibility status tracking, and more.

Benefits and Retirement

how do small churches handle payroll

The specialized ministry payroll feature ensures churches receive unearned revenue special exemption status when it comes to taxes and other related processes, making it easier than ever before to manage employee payments. On top of that, MinistryWorks also offers an audit assistance feature which gives churches the confidence they need when submitting payroll documents. Yet, the right payroll service provider can make the process much more manageable. Gusto is one such provider that has been making waves in the church payroll services market. With its time-saving payroll solutions, automatic compliance, and accurate payroll delivery capabilities, Gusto has won positive reviews from churches across the United States. Patriot Payroll is a payroll company based in the United is a good option for small churches as it offers flexible and affordably priced payroll plans.

Step 2: Revisit worker classifications for ministers, employees, contractors, and volunteers

how do small churches handle payroll

Gusto is the best payroll service for small churches because it offers solid pay processing with tax compliance and HR tools at a reasonable price. It supports church payroll needs by allowing tax exemptions for the church and ministers. Church employees can also access their pay information through a self-service portal. It even integrates well with Aplos, a nonprofit fund accounting software that tracks payroll and tax payments for nonprofits and churches. We compared 17 payroll services for churches, looking for functionalities we believe are most important for ministries.

Empower Your Employees

how do small churches handle payroll

One of the tasks that you are likely to struggle with is expense tracking. Learn how to avoid them by increasing transparency and accountability in church… Integrating these tools can lead to more efficient financial management and reduce the risk of errors. Conducting regular audits ensures that the church’s finances are in order and that all employees are compensated fairly. This also helps in identifying any discrepancies early on and addressing them promptly. Church payroll differs significantly from standard business operations due to its unique considerations.

Cloud-based payroll solutions offer flexibility and church payroll real-time access to financial data. They also come with features like automatic backups, ensuring that the church’s financial data is safe and secure. Managing finances is a critical aspect of every organization, and churches are no exception.

They’re more of a “people platform” than just payroll, and church is about people. For example, we love that you can welcome new people and sign birthday cards through the platform. If you read the above sections and think, “We’ve really messed up withholding on pastors’ paychecks,” you’re not alone. A stipend is a small salary (usually in the education world) to cover expenses for someone like an intern. But it should never be equal to wages, subject to Department of Labor rules under the Fair Labor Standards Act.

how do small churches handle payroll

Manage Payroll: Classification of Workers

However, we still included Square Payroll is a payroll service that allows you to pay in our list of best church payroll services given its low-cost payroll, tax filing, and employee benefits solutions. Many users said that its Affordability is one of Square Payroll is a payroll service that allows you to pay’s best features. They also like that it has a user-friendly platform that helps them save time when processing payroll. To sum it up, church payroll services can be a bit different than regular business payroll, due to tax exemptions and other factors. The five companies listed above are all highly rated and offer excellent customer service. If you’re looking for payroll software that will make your life easier, Bookstime any of these providers would be a great choice, but please be sure to do your due diligence and research to ensure the company meets all your needs.