08 Dec Are Church Musicians Considered Employees?
If your church pays musicians to perform during services or other events, you’ll need to determine if they are employees or independent contractors. The biggest distinction between W-2 employees and 1099 workers is the amount of control you have over them.
With a W-2 employee, you have the right to direct the work being performed. That means giving instruction and providing the tools, training, and equipment to complete the work. You also set their hours and schedules. They often have a frequent association with the church and are paid hourly or salary.
Conversely, according to the IRS’s fact sheet on employee versus contractor designations, the general rule is that a worker is an independent contractor if you have the right to control only the result of the work, not what will be done, how, or when. As a result, 1099 contractors use their own methods and tools for completing work. Even though they may work for a specific project or period, they do it on their own schedule. And they can provide similar services to other businesses and can accept or turn down work opportunities as they wish. They often have an infrequent association with the church and are paid on contractor only.
When evaluating the work of musicians you hire, you’ll need to consider the amount of control over them. So, for example, are you selecting the music they play or their performance, or is the musician collaborating in those activities?
If you decide a musician is an employee, then you’ll report their wages and all compensation for the year using a Form W-2, which will also show the withholdings you made from their pay. Or, if they’re an independent contractor, you’ll need to issue a Form 1099-NEC at tax time to report their compensation if you pay them $600 or more during the calendar year.
This information is provided with the understanding that Payroll Partners is not rendering legal, human resources, or other professional advice or service. Professional advice on specific issues should be sought from a lawyer, HR consultant or other professional.