Three Things to Consider Now That Your Church or Ministry is An Employer

So your church has taken a big leap and hired your first employee. Guess what, you’re now an employer.

As the church grows so does the need for help. There are many cases where you can be blessed to have volunteers pitch in, which we all know is a double-edged sword, but there are just times that it’s time to hire that first employee.

We’ve written information about having volunteers and how sometimes there are positions that are just better filled by a paid person.

Hiring that first employee is something that needs to be done with some forethought.

I’ve met several pastors that have hired their first employee and in hindsight realized they did it for the wrong reasons. Yes, there may have been work that they could do, but their motivation was really the pride that hiring an employee would mean that the church has some how now “made it”.

In reality, hiring that first employee in some cases has been the detriment for the church. There is a whole new set of needs and requirements that come into play now that your church is an employer.

Here are three things to consider now that your church has employees. In most cases, your ministry just got more complex.

1. You now have a new set of legal requirements and filings

As an employer, you are now on the “radar” of the government. I write that sort of tongue and cheek, but it is true. There is a new set of expectations from your organization now.

At the very least, you are now responsible for notifying the government via monthly or quarterly forms that detail the payroll information for the previous quarter. This requirement starts the day you begin compensating a person in an employment relationship.

“But we only pay a pastor and his compensation is all housing allowance…”

Doesn’t matter.

If that person is paid as an employee of your organization, you need to file the forms. Many times in this situation you will file the forms with $0.00 in the box for the taxable compensation numbers, but nonetheless the forms still need to be sent.

Secondly and very important, in most if not every case, the pastor IS and employee. Pastors are considered “Dual Status” which means they are an employee for Federal withholdings, but considered self-employed for SECA amounts (Medicare and Social Security). We will cover this in more detail in another post detailing pastors compensation.

Just remember, now that you are compensating people as employees, you have an obligation for accurate records.

One more thing on this before we move on, it is NOT ok to circumvent this by saying the person is an Independent Contractor and pay them via 1099-MISC. The IRS has very clear guidelines regarding this and that person has to met certain criteria to qualify. This is an area we see many churches handling incorrectly. We will also address this in an upcoming post.

2. You are now a boss.

Chances are you went got into ministry because your life was changed by the Gospel and you want to serve the Lord by helping others know the life changing Good News of the Gospel. You chose to be a pastor to preach the Word, disciple and encourage others in their faith, and work to spread the story of Jesus with your community.

I’ll bet you didn’t get into ministry with plans to run a small business.

As pastor of your church you are in a unique position once you hire that next employee. You serve a dual role as both pastor and boss.

Many lead pastors will attempt to delegate this responsibility to a committee or leadership team which will work in some instances, but is not the best solution. You’ve probably been around enough churches that are committee driven and in almost every case, those churches have horror stories on how people (pastors) have been treated.

I could write volumes of stories that I’ve seen and heard of churches and situations that have occurred with committees.

This has also been solved in some cases where churches have hired a pastor specifically for these areas. The Executive Pastor role has become popular recently in churches realizing that there is a huge need for someone to be focused on the administrative responsibilities of the organization.

What happens if you can’t afford that XP role? Guess who the responsibility falls to?

As an employer, there will ultimately be one person the IRS or state and local government looks to for as the “manager” of the organization. As much as many pastors try to say they’ve delegated this role, at the end of the day it will fall on them.

We’ll detail much more later but just remember you now have a dual role in the organization as “shepherd and boss”. Don’t let this role scare you, it really is a great opportunity when handled correctly.

3. Your Employees have expectations of you now that you are an employer

One of the greatest joys that people can have is working for a ministry. The fulfillment of knowing your work is being done for the Lord cannot be found anywhere else.

The minute you hire an employee, there is an expectation on you as the employer. This is a very simple area of being an employer, but is important as well.

Your employees need to have consistent, intentional communication on their role. This goes beyond just talking about job responsibilities and assigning tasks, but an ongoing communication on expectations and feedback.

Setup a time to have a routine, intentional chat with your employees. In our company, I push to have a weekly “check in” chat with every employee. Usually just 10-20 minutes those chats allow me to maintain the pulse of our organization. I get to know what’s going on personally with each person but also can keep a handle on their work-load and how they are feeling.

Secondly, you should have routine performance reviews. This is an area where many churches lack and problems arise. Let me share a scenario.

Let’s say you have an employee that gets hired and is a great worker. As time goes on, because there’s just a plethora of work to get done, and they are such a go-getter, they are able to expand and take care of many things. As boss, you see this as great because it keeps those tasks off your plate.

Months go on and because the work just gets done, you don’t have a chat or job performance review with the person.

Sounds great right?

As you know in most churches we assign tasks on the fly. Most people are doing what they do because they were the only person around that knew how to do something.

Let’s project this out to a story I hear many times. Let’s say that person continues to grow their role and because they have not had any guardrails or parameters of their position put in place, they are responsible for a lot of different things.

Now that person is perhaps in a role that you didn’t originally have for them. Let’s say you want to scale back their responsibilities a bit or they have begun acting “too big for their britches”. How are you going to have that conversation without it being confrontational and awkward?

Without consistent feedback and vision from you, your employees will develop their own vision of where they think things need to go and that may not match your vision.

Remember as well, It’s not just the employee that is affected by your decisions, but their family as well. We’ll definitely cover this in a later post.


There is so much we can cover on this topic and we’ll continue to publish posts to help you be a better “manager” of the church as an employer.

If you’re concerned about managing the records and legal requirements as an employer, consider outsourcing that to our Church Bookkeeping System. We’ll take care of everything from that perspective so that you don’t have to worry about it. It’s also better than bringing on a volunteer to do it and hope that they know what they are doing.

Choosing to hire that next employee is more than just a status to say that you’ve somehow now “made it” as a church. It’s an entirely new level of ministry that needs to be handled with some forethought and planning.

All that aside, when you’re church becomes an employer, you’re now able to impact more lives and it’s just that next step as the Lord continues to bless your ministry and grow where you’re reaching.

Disclaimer: The information presented in our blog is intended to provide general information for your church.  Because your situation may be fact dependent, please reach out to us or a local church expert for guidance on any specific situation that may pertain to your ministry.

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