Social Security for Non-Minister Church Staff: Understanding Form 8274

Most church treasurers know that their pastor is treated differently for Social Security purposes. Ministers receive a Form W-2, but the church does not withhold Social Security or Medicare taxes from their ministerial pay. Instead, ministers pay self-employment tax on their own.

What is less widely understood is how Social Security works for everyone else on the church payroll: the secretary, the custodian, the youth worker who isn’t ordained, the bookkeeper. For these non-minister employees, the answer depends on a single form that many churches don’t know whether they ever filed: Form 8274.

The default: FICA applies to non-minister staff

FICA is the combination of Social Security and Medicare taxes that employers and employees share through payroll. Unless a church has made a special election, its non-minister employees are covered by FICA just like employees of any other organization. IRS Publication 517 summarizes it simply: a church employee is covered under FICA if the employer did not elect to exclude them.

In practice, that means the church withholds the employee’s share of Social Security and Medicare from each paycheck, pays a matching employer share, and reports both on its quarterly payroll returns and the employee’s W-2.

The exception: the Form 8274 election

Federal law allows churches and qualified church-controlled organizations to elect out of the employer side of FICA by filing Form 8274. Two conditions matter most:

• Religious opposition. The organization may make the election only if it is opposed for religious reasons to the payment of FICA taxes. This is not a cost-saving option; it is a statement of religious conviction.
• Strict timing. The form must be filed before the first date on which a quarterly employment tax return would otherwise be due from the church. In other words, the window generally closes early in a church’s life as an employer. A church that has been paying FICA for years usually cannot simply decide to file now.

Once a valid election is in place, the church does not pay the employer’s share of FICA for its non-minister employees and does not withhold the employees’ share either.

What happens to the employees

The election doesn’t make non-minister staff exempt from Social Security. It shifts the responsibility to them. Their wages become “church employee income,” and they must pay self-employment tax on it through Schedule SE when they file their personal returns.

A few details make church employee income unusual:

• A very low threshold. Most self-employed people owe self-employment tax only when net earnings reach $400. For church employee income, the trigger is just $108.28 for the year.
• No deductions against it. Employees of an electing church cannot reduce these wages by business expenses when computing the tax.
• Different from ministers. A minister’s pay for ministerial services is never church employee income; it is reported on Schedule SE through a separate line.

Because no Social Security tax is taken out of their paychecks, employees of an electing church can face an unexpected bill in April. Many treasurers help by explaining the situation at hiring and encouraging staff to make estimated payments or increase income tax withholding to cover it.

Income tax withholding still applies

The 8274 election concerns FICA only. It does not change the church’s responsibility to withhold federal income tax from non-minister employees based on their Form W-4, or its other payroll reporting duties. The election can also be lost: the IRS may revoke it if the organization fails to file Forms W-2 for two years and does not provide requested information, and that revocation applies retroactively to the start of the two-year period.

A year-end checklist for treasurers

1. Find out whether your church ever filed Form 8274. Look for the form and any IRS correspondence in your permanent records. If you can’t find it, assume FICA applies. A blank copy of Form 8274 is available on our free Tax Forms for Ministers & Churches page.
2. Confirm that payroll matches your status. If no election exists, Social Security and Medicare should be withheld and matched for every non-minister employee. If an election exists, they should not be.
3. Separate ministers from staff in your payroll system. Ministers should never have FICA withheld on ministerial pay, regardless of the 8274 election.
4. Prepare W-2s carefully. Year-end forms should reflect the correct treatment for each type of employee.
5. Communicate with staff. If your church has an election in place, remind employees in writing that they must pay self-employment tax on their church wages.

Getting Social Security right for non-minister staff protects both the church and the people who serve it. A mistake here can mean back taxes and penalties for the church, or lost Social Security credits and a surprise tax bill for an employee. If you aren’t sure where your church stands, now, before W-2s go out, is the right time to find out.

If you need guidance that is tailored specifically to your unique situation, we encourage you to connect directly with Pro Advisor Support. Their experienced team specializes in assisting clergy and church organizations with complex tax, payroll, bookkeeping, and HR matters. Whether you have detailed questions about compliance, deductions, or planning strategies, they can provide expert advice and walk you through the next steps with clarity and confidence.

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Maple Grove, MN 55369
Tel: (888) 421.0101

This article provides general information and is not tax or legal advice. Tax law changes frequently, and every minister’s situation is different. Please consult a qualified tax professional before acting on this information.