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

FMCUSA asked that pastor’s pension funds be sent directly to their office.  The prefer that these dollars be sent electronically to them each month.   Please see 

Anytime that there is a change in a pastor’s salary it must be reported to HR for pension purposes. All pastor pension updates are to entered through the FMCUSA website. 

Click on the following links for important information and the necessary withdraw form…

FM DBP Contribution Processing for Local Churches

Please complete the following form, scan and email it to theresa.portwood@fmcusa.org or mail the form to FM, 770 N. High School Rd., Indianapolis, IN 46214

ACH EFT Auto Withdraw form

For additional forms and information

In addition to payments going directly to FMCUSA, all changes (such as salary updates, church appointments, address changes, beneficiary changes, etc.) are the responsibility of the church (Pastor or Treasurer) and are to be entered on their website at http://fmcusa.org/hr/forms

If you have any questions or concerns, please contact Human Relations Department at 317-244-3660 or 800-704-3945.  Jody Belton of our office (317-831-0022) is available to assist you in this process as well.

PENSION is calculated at 10.5% 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.

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

All newly eligible persons need to enroll by completing:

Pension Enrollment form AND the Change of Status forms at:  http://fmcusa.org/hr/forms