Inviting Guest Speakers
A common way that churches choose to provide ministry to their members and communities is through inviting special guest or event speakers.
Each invitation can present it's own unique set of circumstances to be considered when it comes time to compensate the speaker for their valuable time and ministry.
The following are some important questions to ask before inviting a guest speaker:
- Is this a One-Time invitation and payment to an individual?
- Will this be an ongoing commitment with repeated payments to an individual?
- What is the nature of the person's relationship to the church? Are they a member of the church or a pastor of another Foursquare church or an itinerant speaker? Are they a missionary or an out-of-country guest?
- The answers to these questions will help in deciding the appropriate way to proceed.
Guest Speakers
Employment or Self-Employed Amounts
When a guest speaker is invited for a one-time speaking engagement and is paid an honorarium the amount is to be treated as self-employed income by the individual. The inviting church is not required to withhold taxes nor issue a T4 or T4A information slip.
An exception to this would be for visiting Out-of-Country Speakers and Foursquare pastors (see below). Also see Missionaries for further details.
If someone is asked to regularly speak in the church (eg. a church member preaching once a month) and is paid an honorarium, it is to be treated as employment income with deductions taken and a T4 information slip issued.
Compensation Level
Where a guest speaker is invited the church council should decide beforehand the amount of compensation that will be given. The amount that is set must be a reasonable compensation amount with consideration given to the amount of work performed, the costs of coming to the church and the experience of the minister.
In many cases, a “love offering” is taken for the guest speaker after the ministry time and given to them as a gift. The church should make it known that when an offering exceeds the “reasonable limit” predetermined before the engagement, the excess will be used for future ministry opportunities. Where a church does not set a reasonable amount of “love offerings” in respect of services provided the church could be fined by the CRA for providing “undue personal benefits”.
It is recommended that church council set an amount in their budgets and a scale for reasonable compensation amounts that will be applied to all guest speaker arrangements.
Foursquare Licensed Ministers
When a guest speaker is a licensed Foursquare pastor and are employed as such by their local church, amounts paid as a guest speaker in another church are to be reported in their payroll calculation as employment income for tax purposes. Amounts paid directly to the pastor are to be included in payroll calculations for income tax purposes. The inviting church may choose to issue the cheque directly to the employing church rather than to the Foursquare pastor.
Foursquare Missionaries
Foursquare missionaries employed by the national church or by another local Foursquare Church have sending agreements that outline responsibilities for guest speaking engagements. See Missionaries for further details.
Out of Country Guest Speakers
Foursquare Churches that invite guest speakers who are citizens of other countries to minister (one-time or several) in the local church are to follow the CRA process:
- The church is required to withhold 15% from the amount paid to the guest speaker which is then remitted to the CRA as a payroll deduction. This applies whether the payment is made to the individual or the organization they work for in the other country. Churches who plan to do this on a continual basis are required to open a separate payroll account to remit the withholding taxes.
- The church is required to issue a T4A-NR and Summary at the end of the taxation year to the guest speakers to report the amounts paid and the taxes withheld. The tax number of the person/organization is to be recorded on the form. Travel expenses reimbursed to or paid on behalf of the speaker are also to be reported but are not included in the amount to be taxed.
- The guest speaker or organization is then required to complete and file a Canadian tax return to report the income and taxes deducted. Depending on the individual circumstances additional taxes may be assessed.
If the church has out of country paid guest speakers in the church please contact the national office for assistance.