Church BookkeeperAcademy
Is this worker an employee or a contractor?
A free worker check from Church Bookkeeper Academy. Answer a few yes-or-no questions to see how to pay them and what to set up.
Answer for how the job really works. Not what the agreement says, and not what the worker would prefer. Part-time workers are employees too - hours don't change the answer.
1Start here
These can settle the answer on their own.
Are you paying a company that sends its own workers, like a cleaning or landscaping service?
A one-person business counts as No, even if it's an LLC.
Is this person a minister on the church's staff, paid for ministry work like preaching, leading worship, or pastoral care?
Guest preachers paid per visit: answer No.
Is this person already on the church's payroll for another job?
Where is the church?
California uses a stricter test (the ABC test). Check each statement that's true. Unless all three are true, the worker is an employee.
Labor Code §2775. It covers California payroll taxes, wage law, and workers' comp.
Colorado sets a higher bar. State law requires a contractor to run a real independent business, not just be free from the church's control. If the church is their only or main customer, that's a red flag.
C.R.S. 8-40-202(2)
This check uses the federal IRS rules. A few states, including Massachusetts, New Jersey, and Illinois, use stricter tests. If you're in one of them, check with your state's labor department.
2Who controls the work?
The IRS looks at control first. Every yes points toward employee.
Does the church set a regular, repeating schedule for them - weekly services, office hours, or required rehearsals and meetings?
Contractor: sets their own hours. The church only sets a deadline or an event time.
Does someone at the church tell them how to do the work - the steps, the order, what to do next?
Contractor: the church says what result it wants, and they decide how to get there. Answer Yes if the church could direct the work, even if it rarely does.
Does the church train them or have them follow church procedures for the job?
Contractor: brings their own know-how. Church rules stop at safety, building access, and child protection.
Does a staff member supervise them or check their work along the way?
Contractor: the church only checks the finished work.
3Who carries the money risk?
Contractors run a business. Employees get paid for their time.
Are they paid for their time - by the hour, week, service, or a regular stipend?
Contractor: quotes a price for the job and sends an invoice.
Does the church provide the tools, equipment, and supplies, or pay them back for what they buy?
Contractor: brings their own gear and covers their own costs.
Is the church their only or main customer for this kind of work?
Contractor: does this work for others too and advertises it, like with a business name, website, or social media page.
4What's the relationship?
Ongoing work that's built into church life points toward employee.
Is it ongoing, with no set end date?
Contractor: a set project, event, or time period.
Is the work a regular part of church life - worship, kids, office, or facilities?
Contractor: a specialty the church doesn't do itself, like electrical work, the annual audit, or a website build.
Do they get anything staff get - paid time off, retirement, a title, a church email, or a spot on the staff page?
Contractor: no benefits, and not presented as staff.
5Save a recordOptional
Copy a summary for the worker's file. Nothing here is saved or sent anywhere.
See the summary
What to do next
Common church roles
Most roles land the same way every time. If your result is different, look closely at the last column.
| Role | Usually | Unless |
|---|---|---|
| Staff pastor or minister | W-2 minister rules | Almost never a contractor |
| Guest preacher or visiting speaker | 1099 | They preach here on a regular schedule and don't serve other churches |
| Worship leader and regular musicians | W-2 | A musician or band hired for one event who runs their own act |
| Sound, lighting, or livestream tech | W-2 | It's a production company with its own gear, crew, and clients |
| Nursery and childcare workers | W-2 | Almost never. Workers from an outside agency are the agency's employees |
| Office staff and in-house bookkeeper | W-2 | It's an outside bookkeeping or accounting firm with other clients |
| Custodian or maintenance person | W-2 | It's a cleaning or repair company with its own crew, tools, and insurance |
| Interns, residents, VBS and camp staff | W-2 | Rarely. Short-term and learning roles are still jobs |
| Paid "volunteer" with a regular stipend | W-2 the stipend is pay | They only get paid back for expenses, with receipts |
| Photographer, videographer, or designer | 1099 | They work set hours under staff direction and have no other clients |
Close calls and past mistakes
Still not sure?
Treat them as an employee, or ask a CPA or employment attorney before the first payment. Once work starts, either side can ask the IRS to decide using Form SS-8. It can take six months or more and covers federal taxes only.
Already paying someone the wrong way?
Talk to a CPA before moving them to payroll - the order matters. If the church always treated them as a contractor, filed their 1099s for the past three years, and isn't under audit, the IRS settlement program (Form 8952) settles past years for about 1% of last year's pay. Apply at least 120 days before the switch.
If the IRS asks first
A federal rule called Section 530 may protect the church from back payroll taxes if it had a reasonable basis, treated similar workers alike, and filed the 1099s. Save each worker's summary and copies of the 1099s.