The answer to a client question applies to many churches regarding payment to a pastor for a ‘non-standard’ service, such as a wedding:
“One of our pastors performed a wedding service for a couple. The family made a contribution directly to the church for the service. How do we (the church) pay the minister that performed these services?”
Answer: The church may include payment (any amount designated by the family and determined by the church) as a “bonus” through the payroll service.
Another option is for the family to pay the minister directly. How much is standard? There are many factors that enter into the decision of how much pastors are paid. Considerations include whether the couple or the couple’s family is a member of the church, where the wedding is held, and whether or not the pastor performs pre-marital counseling. According to wedding Websites, ‘The Knot’ and ‘Brides.com’ the going rate is currently $200 to $800.
If the minister gets paid directly for a service by the family, then the amount will not be part of the Form W-2 provided by the church for reporting on Form 1040 for income tax. Therefore, the minister needs to keep track of ‘outside’ compensation for reporting at tax time.
Minister compensation can be confusing, because ministers are treated differently from other church employees. If your church has any questions about minister compensation or how to define who is a minister, please contact a Salmon Sims Thomas tax advisor.