Managed Payroll · Churches & Faith-Based Organizations

Managed Payroll for Churches and Faith-Based Organizations

Minister housing allowance, dual-status clergy, and SECA elections -- done right. Church and faith-based organization payroll has no equivalent in any other industry: ministers operate as employees for income tax purposes but self-employed for Social Security, housing allowances must be pre-designated before the year they are paid, and FICA exemption elections for religious organizations carry their own requirements. We manage all of it at $25-$45 per employee per month.

See your exact monthly & annual price - no call required

$25-$45Per employee per month, all-inclusive

All 50States covered, including multi-campus organizations

No migrationWorks in your existing system

Why Church Payroll Is Different

Three clergy and religious organization payroll rules that have no parallel elsewhere.

Dual-status

Ministers are employees for income tax but self-employed for Social Security -- simultaneously

For federal income tax withholding purposes, a minister is generally an employee of the church and receives a W-2. But for Social Security and Medicare tax purposes, the same minister is treated as self-employed and pays SECA rather than FICA. This dual status is unlike any other employee category and requires specific W-2 setup, quarterly estimated tax guidance, and accurate housing allowance reporting.

Pre-designation

The minister housing allowance must be formally designated by the governing body before the year it is paid

Under IRC Section 107, a minister may exclude a housing allowance from gross income -- but only if it was officially designated by the church or organization in advance of the year it is paid. Retroactive designations are not valid. Churches that miss the pre-designation step lose the exclusion for that year, creating unexpected income tax liability for the minister.

FICA election

Qualified religious organizations may elect exemption from FICA for non-minister employees

Churches and qualified religious organizations may file Form 8274 to elect exemption from employer FICA taxes for non-minister employees. Employees then pay SECA on their wages. The election has specific eligibility requirements and affects how payroll is processed and reported for every non-clergy staff member.

Who We Manage Payroll For

Every role in your organization, handled with the right tax treatment

Senior and associate pastors

Dual-status W-2 setup, housing allowance pre-designation process, SECA rather than FICA withholding, and W-2 Box 14 housing allowance reporting. Quarterly estimated tax guidance included.

Non-minister staff

Administrative staff, ministry directors, youth workers, and support staff -- processed under standard or FICA-exempt payroll depending on your organization's election status.

Part-time and seasonal staff

Vacation Bible School staff, seasonal event workers, and part-time ministry employees processed correctly with appropriate tax treatment and new hire reporting.

Multi-campus and denominational structures

Multi-location churches, school ministries, and affiliated organizations managed under a unified payroll engagement with location-specific state registrations.

How It Works

Three steps to fully managed church payroll

Scope review

We map your ministerial staff, housing allowance designations, FICA election status, non-clergy roster, and any multi-campus structure. You get a fixed monthly cost before we start.

Payroll configuration

We configure dual-status minister payroll, review your housing allowance designation process, set up FICA or SECA treatment for each employee category, and handle state registrations. No migration required.

Ongoing managed service

Every pay cycle, every pre-designation reminder before year-end, every state filing, and every year-end W-2 -- fully managed by BEG. Your board approves the housing allowance, we process everything else.

What You Get

Three things most payroll vendors do not offer churches and faith-based organizations

Bonus 01No migration. We work in your existing system.

Common objection: "We have used the same simple payroll setup for years and do not want to disrupt it."

We do not require you to change platforms. BEG operates as your managed payroll team inside your current system. If you want to move to isolved for a more capable platform that handles clergy payroll correctly out of the box, we can manage that transition -- but it is never a requirement.

Bonus 02All-inclusive flat rate.

Common objection: "Our budget is tight and we cannot afford payroll services that nickel-and-dime us."

The $25-$45 PEPM rate covers everything: dual-status minister payroll, housing allowance tracking, FICA or SECA processing, state filings, year-end W-2s, and BEG support. One number, everything included.

Bonus 03A dedicated BEG contact who understands clergy payroll.

Common objection: "We call our payroll company and they have never heard of a housing allowance."

Your BEG payroll specialist is your ongoing contact -- not a call center that has to look up what a minister is. When your board designates a new housing allowance amount, when you add a campus, or when a minister asks why there is no FICA on their check -- one message to your BEG contact gets it explained and handled.

Getting Started

From scope review to compliant church payroll in 3-5 business days

Day 1

Scope review call

15 minutes. We map your ministerial staff, housing allowance designations, FICA election status, and non-clergy roster -- and give you a fixed monthly price.

Days 1-2

Onboarding

Agreement signed, system access granted, ministerial arrangements and housing allowance documentation reviewed.

Days 2-4

Configuration

Dual-status minister W-2 setup, housing allowance tracking, and FICA or SECA processing configured in your existing system.

Day 5

First live payroll

Your first fully managed church pay run -- BEG executes, your board approves the housing allowance, we handle everything else.

The Math on Waiting

A missed housing allowance pre-designation creates personal tax liability for your pastor.

When a church fails to formally designate the housing allowance before the year starts, the entire housing allowance becomes taxable income for the minister for that year. On a $30,000 housing allowance, that is roughly $7,000 in unexpected federal and state income tax -- plus self-employment tax -- owed personally by your pastor. Managed payroll includes the pre-designation reminder process so this never happens.

Your Next Transition Window

The best time to get church payroll right is before the new year begins.

Housing allowance pre-designations must be in place before January 1. Transitions take 30-60 days. Starting the scope review now means clean, compliant payroll from the first pay cycle of the new year -- and a pastor who does not have a surprise tax bill come April.

15 minutes. We scope your ministerial payroll, housing allowance setup, and FICA election status -- and give you a fixed monthly cost.

FAQ

Common questions from churches and faith-based organizations

How do you handle the minister housing allowance?

We set up your W-2 to report the housing allowance correctly in Box 14, send your board the pre-designation resolution template before each year-end, and track the housing allowance throughout the year. We make sure the amount designated, the amount paid, and the amount excludable under IRS limits are all documented and reconciled at year-end.

Why does our pastor not have FICA withheld?

Ministers are treated as self-employed for Social Security and Medicare tax purposes, regardless of their employment status for income tax. This means the church does not withhold FICA and does not pay the employer FICA match for ministers. Instead, ministers pay SECA on their earnings. We configure W-2s correctly to reflect this and help ministers understand why their paycheck looks different from non-clergy staff.

Can the church elect to be exempt from FICA for all employees?

Qualified churches may file Form 8274 to elect exemption from employer FICA taxes. We review your eligibility, advise on the implications for your non-clergy employees, and process payroll accordingly if you have already made the election or choose to make it.

Do we have to change payroll systems?

No. BEG operates as your managed payroll team inside your existing system. Migration is an option if you want to upgrade, never a requirement to get started.

What does $25-$45 PEPM include?

Everything: dual-status minister payroll, housing allowance tracking and documentation, FICA or SECA processing, state filings, year-end W-2s, and BEG support.

Can a minister opt out of Social Security?

Yes, under specific circumstances. A minister may file Form 4361 to apply for an exemption from self-employment tax on ministerial earnings if they have a sincerely held religious objection to public insurance. The exemption is permanent once approved by the IRS. We flag this option for ministers who qualify and ensure W-2 reporting reflects the election correctly throughout their tenure.

How do you handle payroll for church-operated schools, daycares, or other ministry programs?

Multi-ministry organizations with schools, daycares, camps, or other programs alongside the main church have distinct payroll considerations. Staff employed by a specific ministry arm may have different FICA treatment depending on that entity's tax status and organizational structure. We scope each entity and apply the correct payroll treatment to each staff category -- one managed engagement, all ministries covered.

How long does it take to set up managed church payroll?

From signed agreement to live payroll: 3-5 business days. We configure dual-status minister W-2 setup, housing allowance tracking, and FICA or SECA processing for each staff category in your existing system. If you are transitioning before year-end, we also audit the current year's housing allowance designations to catch any documentation gaps before the W-2 deadline.