Pastoral Salary & Benefits / How to Handle Pastor's Pay Package, Pension, Insurance, Etc.  READ MORE

 

Life/LTD/AD&D – All full-time pastors are to participate in these plans.  The current premium is $32 per month, and is to be paid by the church in advance of the coverage to the conference office.

Insurance Details - Life, AD&D, LTD & Voluntary Life

Voluntary Term Life – this is a optional policy for our pastors and is available through our office.  Contact Judy Kinnick for information.  Note: any premium cost of employer provided life ins that exceeds $50,000 is to be reported on the W-2.  Notices will be sent from our office to those affected.


IRS considers Ordained Pastors as Self-Employed . . .

Therefore, Pastors are responsible for their Social Security Tax Withholdings AND the Employer’s Portion.  This is called Pastor’s Self-Employment tax (commonly referred to as Social Security) and is calculated on: Salary, housing allowance or fair rental value (plus utilities) of the parsonage.   The current rate is 15.3%.  If the pastor is going to handle their tax deposit requirements, the church treasurer should ask the pastor to complete a W-9 form so that the church has the proper information for the W-2.

In some cases, if a church has the “manpower” and is set up to handle payroll (not all are), a pastor may ask that the church handle their taxes for them (either through payroll, or by making their quarterly tax deposits).  If all are in agreement for the church to handle the pastor’s taxes through payroll, then a W-4 form and State Withholding form should be completed by the pastor.  Please see your state web site for the appropriate state withholding form.

Whether the Pastor (or the Church Treasurer-out of courtesy) takes responsibility for the Tax Deposits, here is a link to the Federal 1040-ES form and Instructions for making Federal Self-Employment tax deposits. irs.gov/pub/irs-pdf/f1040es.pdfIf additional vouchers are needed, please search www.irs.gov for the form with the correct date.

See the state web site in which the Pastor lives for the state estimated tax deposit instructions. Remember, ultimately the Pastor (who is considered self-employed) is responsible for making the tax payments.

Federal and State stimated tax payments are due each: January 15, April 15, June 15, and September 15.

The following spreadsheet is a quick tool for calculating self-employment tax at 15.3% (and FM Pension) . . .    Social Security and Pension Calculations
Notes for Preparing Pastor W-2s

Pastor's Housing Allowance

We highly recommend a Payroll Service that specializes in church/pastor payroll.  See our 
Insurance & Payroll Services  page for cost information and recommendations.

Please contact Jody Belton, Business Manager at the Conference office at (800) 704-3945 for additional information.
 

Health Insurance  The following is a link from FMCUSA – Human Resources regarding Health Reform  http://fmcusa.org/hr/conference-resources

This is the form that all Wabash churches must provide to their employees (including pastors).  Health Care Reform Employer FLSA Form

Contact the Conference office (800-704-3945) for additional information.


Accountable Professional Expense Practices

FMCUSA Pension Information & Forms

To be eligible for the FMCUSA pension plan, one must be receiving compensation and is either a full or part-time ordained, appointed Pastor to a local church or church plant, a full or part-time Conference Ministerial Candidate appointed as a Senior Pastor to a local church or church plant, or a Superintendent or full time employee of an Annual Conference.  A Licensed Pastor is NOT eligible unless previously ordained in another denomination.  Click here for additional eligibility and plan information – http://fmcusa.org/hr/pensionretirement

 

PENSION is calculated at 13.5% (effective January 1, 2018) of:  Salary, self-employment (social security) tax, H.S.A. or Section 125 withholdings, deferred compensation, parsonage housing allowance or parsonage rental value. Important note> Health Insurance Premiums are NOT to be included in the pension calculation if it is a separate line item in the church’s budget. However, individual health insurance is now taxable, and if the church includes these dollars in the salary line of the budget, then it IS to be included as part of the salary for the pension calculation.  If you have questions about this, please contact our office.

All newly eligible persons need to complete an enrollment form (see link below).

Additionally ANYTIME that there is a CHANGE in a pastor’s salary, it must be reported to HR for pension purposes

All pension updates are to be entered through the FMCUSA website.  Pension Enrollment form AND the Change of Status forms at:  http://fmcusa.org/hr/forms

 

FMCUSA asked that churches send pastor’s pension funds directly to their office.  They prefer that these dollars be sent electronically via ACH each month.     


For additional forms and information:

http://fmcusa.org/hr/pensionretirement

FMCUSA, Human Relations Department

770 N. High School Rd., Indianapolis, IN 46214

317-244-3660; pension@fmcusa.org 

Jody Belton of our office (317-831-0022) is available to assist in this process as well.