Are pastors considered self-employed?

Answered by Willian Lymon

Pastors are considered self-employed for federal income tax purposes by the IRS. This means that they are responsible for paying their own taxes and are not considered employees of the church in the traditional sense.

Being self-employed as a pastor has certain implications for tax purposes. Pastors are typically responsible for paying their own income tax, as well as self-employment tax, which covers Social Security and Medicare taxes. This is different from employees who have these taxes deducted from their paychecks by their employers.

One reason why pastors are considered self-employed is because of the nature of their work. They often have more control over their schedule and how they carry out their duties, which aligns with the characteristics of self-employment. Additionally, pastors may receive income from various sources, such as honorariums for officiating weddings or funerals, speaking engagements, or book royalties. This income is not typically subject to withholding, further supporting the self-employed classification.

It’s important to note that not all pastors are considered self-employed. Pastors who are employees of a church, with a set salary and benefits, would not be classified as self-employed. However, pastors who are not affiliated with one specific church and may travel or work on a freelance basis, such as evangelists, would likely be classified as independent contractors.

Being self-employed as a pastor can have both advantages and challenges. On the one hand, it allows pastors to have more control and flexibility in their work. They may have the freedom to set their own hours and pursue additional income opportunities. On the other hand, being self-employed also means that pastors are responsible for managing their own taxes, keeping track of expenses, and making quarterly estimated tax payments.

In my personal experience as a pastor, I have found the self-employed status to be both liberating and challenging. It has given me the flexibility to pursue different ministry opportunities and engage with various congregations. However, it has also required me to be diligent in managing my finances and staying on top of tax obligations.

To summarize, pastors are generally considered self-employed for federal income tax purposes by the IRS. This classification is based on the nature of their work and the control they have over their schedule and income sources. While there may be variations depending on the specific circumstances, pastors who are not employees of a church are typically responsible for paying their own taxes and are subject to self-employment tax.