Managing payroll for churches can be challenging due to unique needs, such as clergy housing allowances, tax-exempt income, and non-standard employment structures. The best payroll service for churches should be able to handle these specific considerations with ease. Here are some top payroll service options that are well-suited for churches:
1. Gusto
Gusto is an all-in-one payroll and HR service that’s known for its ease of use. It handles clergy payroll, housing allowances, and automatic tax filings. Here’s why it’s great for churches:
- Clergy-specific features: Handles tax-exempt wages and the unique aspects of clergy compensation, including housing allowances.
- Automatic Tax Filing: Federal, state, and local tax filings are automated, which reduces administrative burden.
- Benefits Management: Gusto can help manage employee benefits, including health insurance and retirement plans.
- Affordable Pricing: Pricing scales with your needs, making it affordable for small churches.
Best For: Small to medium-sized churches needing an easy-to-use system with clergy payroll management.
2. Paychex
Paychex is a well-established payroll provider that works well for churches of all sizes. It offers features that cater to complex payroll needs:
- Clergy Tax Treatment: Handles clergy-specific tax issues, including exemptions and housing allowances.
- HR and Payroll Services: Provides a full range of services beyond payroll, including retirement plans, health benefits, and human resources.
- Compliance Support: Helps ensure compliance with IRS regulations and church-specific tax rules.
- Custom Reporting: Offers custom payroll and financial reports tailored to the needs of churches and non-profits.
Best For: Larger churches with more complex payroll needs, including additional HR support.
3. MinistryWorks
MinistryWorks is a payroll service created specifically for churches and faith-based organizations. It focuses on the unique payroll requirements of ministries:
- Church-Specific Services: Specializes in housing allowances, clergy compensation, and church-specific tax rules.
- Tax Filing Support: Handles all federal and state tax filings, ensuring compliance with clergy-specific tax exemptions.
- Easy Setup and Use: Designed for users who may not have extensive payroll experience, making it ideal for small churches.
- Customer Support: Offers strong customer support with deep knowledge of church payroll issues.
Best For: Churches that need a faith-based payroll service specifically designed for ministry work.
4. QuickBooks Payroll
QuickBooks Payroll integrates seamlessly with QuickBooks accounting software, making it a great option for churches already using this platform for their finances:
- Seamless Accounting Integration: Automatically syncs payroll data with your QuickBooks accounting system.
- Customizable Payroll Features: Easily handles clergy payroll, housing allowances, and non-taxable income.
- Tax Filing and Compliance: QuickBooks takes care of federal and state tax filings, ensuring compliance with payroll regulations.
- Flexibility: Offers payroll for both full-time and part-time employees, volunteers, and contractors.
Best For: Churches already using QuickBooks for accounting who want a streamlined payroll solution.
5. ChurchShield Payroll
ChurchShield Payroll is tailored specifically to churches, providing payroll solutions that align with IRS guidelines and clergy compensation needs:
- Clergy and Non-Profit Payroll: Specializes in handling tax-exempt wages and the specific tax treatments required for church staff and clergy.
- Direct Deposit & Tax Filings: Offers direct deposit for staff and handles all tax filings, including W-2s and 1099s.
- Custom Reports: Provides easy-to-understand reports, helping churches track payroll expenses and tax compliance.
Best For: Churches looking for a service designed exclusively for faith-based organizations with a focus on simplicity and compliance.
Conclusion:
For most churches, Gusto offers the best combination of affordability, ease of use, and church-specific payroll features. However, for larger churches or those with more complex HR needs, Paychex or MinistryWorks may be a better fit. If you’re already using QuickBooks, their payroll integration could streamline your financial operations, while ChurchShield Payroll is a solid choice for churches seeking a faith-based service focused entirely on ministry payroll needs.