Payments to Individuals
2. The church should take time to carefully consider when making gifts or payments to individuals. Whether it is recognized by the church or not, when an individual begins to be compensated, in the eyes of the law the relationship changes from a voluntary/volunteer position to an employment position with all the legal and employment obligations that go with it.
If the church is not in a financial position to meet these obligations it should refrain from compensation until another time. If the church decides to proceed then there should be clear communication between the church and the person as to the expectations and obligations that are now a part of the employment relationship.
3. The church, as a registered charity and payroll registrant, is fully responsible to deduct all applicable taxes at source. The church should ensure that current TD1 forms are completed for all paid employees to ensure that the proper amounts are being deducted.
At no time is the church to alter the amount of deductions at the direction of the employee or if the amount is considered small. There may be circumstances where the employee has several sources of income, but the church is not to be expected to accommodate these varied tax situations on behalf of the employee. The church’s first obligation with this respect is to follow the guidelines of the Income Tax Act and charitable regulations.