Add a Minister to Payroll

A minister has specific payroll setup requirements that differ from a regular employee. This article walks you through selecting the appropriate options when adding a minister, including employee information, compensations, deductions, and tax settings.

Add New Employee

1. From Payroll, select Modify > Employee Information.

2. Click the Add New Employee link.

3. The Person Search window appears. To avoid adding a duplicate, enter the last name in the Name field and click Search.

4. If the person is listed on the grid, click the person and click Select. If the person is not listed, click Close to add a new employee.

5. Enter the employee's name. If you chose Select in the previous step, verify that the name is displayed correctly.

Employee Information Tab

1. Select the Minister check box.

Note: Selecting this box ensures that Social Security and Medicare taxes are not calculated for this employee. It also allows compensations marked "Minister Only" to be assigned to this employee.

2. Enter the Minister Date as appropriate. The Minister Date field represents the day a minister meets the IRS requirements to be a minister. For example, you may hire a youth pastor who is not ordained, and during the year that youth pastor becomes ordained.

Compensation Information Tab

Compensations for a minister may include the following:

• Salary/Hourly (Regular Wages)
• Housing allowance to purchase or rent a home
• Business expense reimbursements (nonaccountable)
• Cell Phone Allowance
• Auto Allowance (nonaccountable plan)
• Life Insurance Premiums over $50,000
• Social Security tax paid by church

Refer to the Set up Compensations and Deductions article if any compensations or deductions for this minister have not been set up.

The following steps guide you through adding a Cell Phone allowance to the minister's record.

1. Click the Compensations tab.

2. Click the Add New Compensation icon-link.

3. Select the Compensation and Distribution from the drop-down lists. Assign the Starting Date for this compensation to take effect and set the # Pay/Year that corresponds with your organization's pay schedule. Select any other options as appropriate and enter the Pay Rate Information. Click OK when finished.

4. Continue adding other compensations as appropriate for this minister. When finished, review the compensations that have been added.

Deduction Information Tab

It is not unusual for ministers to have a deduction for retirement such as a 403(b). In some cases, they may also have a deduction for a charitable contribution to the church. The following steps guide you through adding a 403(b) retirement deduction.

1. Click the Deductions tab.

2. Click the Add New Deduction icon-link.

3. Select the Deduction and Distribution from the drop-down lists. Assign the Starting Date for the deduction to take effect, then enter the amount or percentage in the Amount field. Select any other options and click OK.

4. Continue adding other deductions as appropriate for this minister. When finished, review the deductions that have been added.

Updated May 15, 2026 17:37