As summer winds down, many churches and ministries begin preparing for one of their busiest seasons of the year. Between Thanksgiving outreach, Christmas programs, year-end giving campaigns, concerts, and special services, ministry leaders often find themselves juggling dozens of responsibilities.
One area that shouldn’t be left until the last minute is payroll.
Planning your ministry’s payroll now can prevent unnecessary stress and help ensure your staff is paid accurately and on time throughout the holiday season.
Review Your Holiday Payroll Schedule
The holidays often affect payroll processing because banks close for Federal Reserve holidays. If your normal payroll processing day falls near Thanksgiving, Christmas, or New Year’s Day, you may need to submit payroll earlier than usual.
Now is a great time to:
- Review every payroll date through the end of the year.
- Identify any processing deadlines that will change.
- Coordinate with your finance team to ensure funds are available.
- Communicate any schedule changes to employees well in advance.
A little planning today can eliminate last-minute scrambling later.
Start Planning for Christmas Bonuses
Many ministries bless their employees with year-end bonuses or special appreciation payments. Before those decisions are made, leadership should discuss:
- Bonus amounts
- Payment dates
- Budget availability
- Whether bonuses will be “grossed up”
- Payroll tax implications
It’s also important to remember that cash bonuses and most gift cards are taxable wages and generally must be processed through payroll.
Begin Next Year’s Budget Discussions
Fall budget planning often begins well before the end of the year. Payroll expenses are typically one of the largest items in a ministry’s budget.
Payroll reports can help leadership estimate:
- Salary expenses
- Employer payroll taxes
- Retirement contributions
- Insurance costs
- Benefit expenses
- Planned raises
Accurate payroll information helps create a more realistic ministry budget for the coming year.
Review Housing Allowances
For ministries employing ordained ministers, this is also an excellent time to review housing allowances.
Leadership should confirm that:
- Current housing allowances have been properly designated.
- Payroll records are accurate.
- Next year’s housing allowance approvals are on the calendar before January 1.
Waiting until after the new year may create unnecessary tax complications.
Payroll Partners Can Help
The weeks leading into the holidays are much easier when your payroll provider is involved early. They can help you identify payroll deadlines, answer bonus tax questions, review minister compensation, and ensure your ministry is prepared for a smooth year-end. Payroll Partners is here to help. Communicate early with your Payroll Specialist.
Next Week: We’ll discuss how ministries can prepare their employees, seasonal workers, and volunteers before the holiday season begins.
This information is provided with the understanding that Payroll Partners is not rendering legal, human resources, or other professional advice or service. Professional advice on specific issues should be sought from a lawyer, HR consultant or other professional.
