Church Payroll and HR, Done the Right Way
Minister pay isn't like regular payroll. Housing allowances, dual tax status, love offerings, and volunteer classifications trip up generic payroll software — and general accountants who only handle a church or two. We handle it every day.
The Church-Specific Rules We Handle Every Pay Period
Minister Pay & Dual Tax Status
Ministers are employees for federal income-tax purposes, but self-employed for Social Security and Medicare. We set up payroll to reflect that dual status correctly, every time.
Housing Allowance (Parsonage), Designated Correctly
Housing allowances must be officially designated in advance, in writing, and kept within IRS limits. We help your board document it properly — before the money moves, not after.
W-2s for Ministers, Not 1099s
A minister who's legally an employee should get a W-2, even though they pay self-employment tax on their own. We make sure your reporting matches the actual legal status.
Retirement Plans Built for Clergy
Church retirement plans have their own rules under the tax code. We help structure contributions so they work the way they're supposed to for ministerial staff.
Volunteer vs. Employee Classification
Churches run on volunteers — but anyone paid regularly for their time, from the custodian to the youth director, typically needs to be classified and paid as an employee.
FICA Exemption Elections (Form 8274)
Some churches elect exemption from the employer share of FICA for religious reasons. It's a real option — and a decision that deserves more than a guess.
Workers' Comp & Background Checks
Most states require workers' comp coverage once a church has paid staff, and ministries working with children need documented background-check processes. We help you stay covered on both.
Love Offerings & Guest Speaker Honorariums
Love offerings collected through the church are generally taxable compensation, not tax-free gifts — and guest speaker honorariums have their own reporting rules. We help you report both correctly.
Generic Payroll Wasn't Built for Ministry
Most payroll software and most bookkeepers handle exactly one kind of employee: the regular W-2, FICA-withheld kind. Clergy compensation doesn't fit that mold, and when it gets forced into it, the mistakes are predictable — 1099s issued to ministers, housing allowances designated after the fact (or never at all), love offerings left off the books entirely.
None of that shows up as a problem until an audit, a minister's own tax return, or a departing employee's unemployment claim brings it to the surface. We build clergy payroll correctly from the start so it never has to.
Built for Every Role in Your Ministry
Senior Pastors & Clergy
Correct dual tax status, housing allowance designation, and W-2 reporting handled the way the IRS actually expects.
Church Administrators
One partner for payroll, HR, and compliance so you're not piecing together advice from three different sources.
Boards & Treasurers
Documentation and resolutions for housing allowance designations and FICA elections, ready before your board meeting.
Support Staff
Custodians, administrators, and youth staff paid and classified correctly as the employees they legally are.
Multi-Site & Multi-Staff Churches
Payroll and HR that scale cleanly as your ministry adds campuses, services, and staff.
Christian Schools & Ministries
The same church-specific compliance knowledge, applied to affiliated schools and ministry organizations.
Local Support in Florida and Arizona
Shepherd is based in Pensacola, Florida, with roots in Phoenix, Arizona, and team members in both places today. See how we support Florida businesses or Arizona businesses specifically.
Request a Free Church Payroll Consultation
Tell us about your ministry and we'll follow up with a free, no-pressure consultation.
Call (850) 542-2333 or email info@azsbs.com
This page is educational and general in nature and should not be considered tax or legal advice. Clergy compensation rules are highly fact-specific — talk to our team and your tax advisor about your ministry's situation.