Still Stuck with Manual Payroll
Discover Our Free Payroll Tax Calculator
The Results Includes:
- Gross Pay
- Federal Income Tax
- Social Security & Medicare Tax
- State Tax (If applicable)
- Net Pay
Churches must withhold Social Security and Medicare taxes from employees, but they should not withhold them from ministers' or Pastors' paychecks. If the church withholds the taxes, it must file Form 941 for every quarter. Here’s a complete guide on how clergies file Form 941
Tax withholding requirements of Ministerial Earnings
Self-employed persons should pay SECA (Self-Employment Contribution Act) or Self-employment tax (i.e., 15.3% of FICA taxes). However, employers and employees must contribute an equal share of FICA.
Clergy members who wish to pay self-employment taxes including Social Security and Medicare tax can File Form 4361. If they qualify for exemption only if they have ministerial earnings.
| Category | Covered under FICA | Covered under SECA |
|---|---|---|
| Minister |
Not covered; Ministerial earnings are exempt |
|
| Member of a religious order (hasn't taken a vow of poverty) |
Not covered; Ministerial earnings are exempt |
|
|
Member of a religious order (has taken a vow of poverty) |
Covered if:
|
Not covered; Ministerial earnings are exempt |
|
Christian Science practitioner or reader |
Not covered; Ministerial earnings are exempt |
|
|
Religious worker (employed by a church) |
|
|
|
Member of a recognized religious sect |
|
|