DIOCESAN CENTRAL PAYROLL PROGRAM
*All payroll forms can be found here on our forms page.*
In addition, employees participating in Central Payroll have the ability to take advantage of the Diocese of Maine Flexible Benefit Plan which includes - pre-tax medical/dental insurance premium deductions and medical and dependant care pre-tax deductions (Section 125 Cafeteria Plan.) There are additional costs to participate in the cafeteria plan. Please see the first section of the instructions below.
CENTRAL PAYROLL SERVICE AGREEMENT
The Central Payroll Program is operated by the Diocese as a payroll service to the congregations with the understanding that:
Each participating church reimburses the Diocesan office for all clergy and lay salaries and the employer's share of lay FICA (Social Security and Medicare) tax (7.65%) disbursed on its behalf, such reimbursement being received before any payroll will be issued.
Each participating church will pay the Diocesan office $3.00 per payroll direct deposit.
The cost of participating in our cafeteria plan is an additional $2.77 per pay period per employee per account. In other words, if your employee wants a medical reimbursement account, the annual cost to the congregation is $66.56. This fee is not kept at the diocesan office, but paid directly to Group Dynamic, the third party administrator of the reimbursement accounts.
NOTICE OF CHANGE
I-9 and W-4 WITHHOLDING FORMS AND INSTRUCTIONS
Federal and state withholding forms (FED W4 and Maine W4) are required for all new employees or employees wishing to change their withholding status. All new employees, including clergy, must complete the W-4 forms. If a clergyperson does not want federal taxes withheld, he/she should write “no withholding requested” on Line 7 (of the federal W-4), sign and date the form. Please make a similar notation on the state W-4ME form.
Federal and state withholdings will be calculated on the basis of an individual's withholding status (single, married), the number of exemptions listed on the Form W-4, and the salary paid by the church without regard to other income. Persons requiring additional withholding are advised to include the additional amount on the W-4
As clergy will be issued W-2s at year-end, they are considered employees of their congregations for Federal Tax purposes. As employees, they may elect to have federal and state income taxes withheld by filing a W-4 form - this is considered as voluntary withholding but can eliminate the need for quarterly filing if the correct amount of withholding is requested.
Employment Eligibility Verification (Form I9) must be completed for each new employee.
FICA TAXES (Social Security and Medicare)
a. LAY FICA
It is the responsibility of every employer to withhold social security taxes from the wages paid to each (lay) employee in excess of $100.00 per calendar year. The rate for social security tax will be 7.65% for lay employees. This tax consists of 6.2% for Social Security and 1.45% for Medicare coverage.
b. CLERGY FICA - (FICA is part of the minimum total compensation amount set by resolution at Convention)
For purposes of FICA taxes, clergy are considered to be self-employed and, therefore, subject to a 15.30% rate. According to Canon, clergy must be reimbursed for 1/2 of the self employment tax (7.65% - which is comparable to the employer's portion of lay FICA tax). Calculate the FICA reimbursement as follows:
(Salary + fair rental value* of Rectory + utilities) X .0765 = FICA reimbursement
* = Fair Rental Value = what it would cost someone in your area to rent the Rectory. The IRS may check this rental value, so be sure to estimate the fair rental value. It is recommended that you obtain a professional opinion of this value from a realtor or other qualified individual.
(Salary + Housing) X .0765 = FICA reimbursement
This amount should be recorded on Line B of the Payroll Enrollment/Change Form.
We will be remitting payroll bi-weekly for a total of 26 pays. Find the 2018 schedule of deadlines and paydates here.
In order for paychecks to be remitted promptly to the employee, funds MUST be received in the diocesan office by noon of the deadline listed.
EMPLOYEE CONTRIBUTION OF INSURANCE PREMIUMS
If your employee has medical/dental insurance premiums withheld from their paycheck, a check in the amount of the total withheld will be sent from the diocesan office to the church on a monthly basis. Insurance premiums will continue to be paid by the congregation.
EMPLOYEE CONTRIBUTION TO PENSION FUNDS
Employees may contribute to many qualified 403(b) pension programs provided the plan has a provision to accept contributions from the Diocese of Maine. These contributions will be deposited into the employee's account bi-monthly.
DEPENDENT CARE AND MEDICAL REIMBURSEMENT ACCOUNT WITHHOLDING
These amounts will be sent to Group Dynamic, Inc. by the Diocesan office after each payroll for credit to the employee's account. These amounts may not be changed during the plan year unless you have a qualified family status change. It is also important to note that monies set aside in Section 125 Cafeteria plans must be used for qualified expenses or the money is non-refundable.
Payment for payroll including hourly employees is a little more complicated. The most convenient and accurate way for it to be handled is using the direct debit program where the Diocese of Maine debits your checking account for the exact amount of your payroll at the same time that we process direct deposits.