benefit package for Pastors
We are a small church and do not have a group health ins. policy. this is how we would like to present a compensation package for our new pastor.
The church will designate a "total package" price.
The pastor will then complete a form indicating 1)the amount he would like paid to his retirement account (sent by the church to the denominational association's retirement fund), 2) the amount of his medical insurance premium (mailed by the church to his own health insurance company) and 3) the balance would be his gross check amount.
An additional form would be completed by the pastor, breaking down his anticipated housing allowance and that amount would be approved by the church body with the understanding that the pastor would have to substantiate that amount for tax purposes.
The church would base his w/h taxes on the gross paycheck amount less the housing allowance, plus the amount we reimburse him for 1/2 of his SE tax deposit.
The amount paid by the church for his retirement and for his medical insurance would be listed on his tax statement at the end of the year in the appropriate boxes.
Is this legal?