It's important for the church (council) to remember that the moment a decision is made to remunerate a pastor or staff person they automatically become responsible to adhere to the governing authorities and guidelines of our wonderful country!
Before moving onto the technical aspects of employment, payroll and the accounting function I thought it would be helpful to give an overview of the various laws, regulations and policies that influence how we steward this area of the church's ministry.
Canadian Income Tax Act: When administering payroll, the church’s first obligation is to follow the guidelines of the Income Tax Act (ITA). There are few cases where a person that is paid by the church would be deemed exempt from taxation as per the ITA.
Regardless of circumstances the church is not authorized to alter or reduce the amounts deducted for Tax, CPP, and EI on amounts paid by the church. Doing so is a legal offence.
Canada Revenue Agency: The church, as a registered charity, is responsible to deduct all payroll taxes at source.
Taxes are deducted according to the CRA Tax Tables provided on their website or through the Sage accounting program.
Deductions are to be remitted on or before the due date set by the CRA. Failure to do so could result in penalties and interest charges charged to the church.
Each province has it's own set of Employment Standards. More details can be found on a previous Foursquare Help blog post: The Church as Employer (Part 1)
Each province also has it's own set of Worker Safety Standards and in some cases will require a yearly insurance premium to be paid to cover work-related accidents or injuries. For more details on provincial safety standards for your province see : Safety Standards by Province
Serving Jesus with You,