Clergy Payroll - What You Need to Know

In June, the Annual Conference body voted to accept CFA’s Proposal to the Virginia Conference as presented in the Book of Reports on page 79. (Find some of the history behind this proposal here.)

Beginning January 1, 2027, clergy payroll shall be administered through one of three options:

(A) Clergy payroll may continue to be managed by a paid professional staff member of the local church.
(B) Clergy payroll may continue to be managed through an outside payroll vendor selected and funded by the local church.
(C) Clergy payroll may be administered by the Virginia Conference Clergy Payroll managed by the Treasurer’s Office at no additional cost to the local church.

What’s Next?

Staff/Pastor Parish Relations shall make a recommendation to the Charge Conference as to which payroll option they are choosing for their clergy. This will be reported by November 30, 2026 via the Clergy Compensation Agreement in Unity, for January 1, 2027.
The Clergy Compensation Agreement replaces the old Clergy Compensation Form.
You can find the full timeline below.
All Clergy and church finance persons should read the FAQ to fully understand the choices and the processes before their Charge Conference.
There will be a webinar on Monday, September 14 at 6:30 PM to provide an overview and a space for Q&A. Registration is required. Specific questions NOT addressed in the FAQ or at the webinar can be sent to clergypayroll@vaumc.org.
All churches MUST select option A, B, or C via the Clergy Compensation Agreement (in Unity) by November 30, 2026. That agreement shall be affirmed as part of the Charge Conference.
For churches selecting option C, Virginia Conference Clergy Payroll, onboarding, account creation, and verification will take place after completion of the Clergy Compensation Agreement and before December 15, 2026.
For churches selecting options A or B, no action is needed beyond the Charge Conference approval of their selection (by Nov. 30, 2026!)

Clergy Payroll FAQs

FOR ALL VAUMC CHURCHES

Click on the question to view the answer.

What was voted on at the 2026 Annual Conference?

Beginning January 1, 2027, clergy payroll shall be administered through one of three options:

(A) Clergy payroll may continue to be managed by a paid professional staff member of the local church.
(B) Clergy payroll may continue to be managed through an outside payroll vendor selected and funded by the local church.
(C) Clergy payroll may be administered by the Virginia Conference Clergy Payroll managed by the Treasurer’s Office at no additional cost to the local church.

What is the difference between the Clergy Compensation Form and the Clergy Compensation Agreement?

The Clergy Compensation Agreement is the new form in Unity for all appointments as of January 1, 2027. This will include the payroll processing election made by the church and will also have the clergy salary, housing allowance, employer benefits, and housing exclusion amounts. The new form replaces the current Clergy Compensation Form and has similar information. The Clergy Compensation Agreement is designed to clearly communicate the actual total employer cost to the local church and in, multi-point situations, how much each church agrees to contribute.

What is the timeline?

The process begins now and continues through Charge Conference Season. You can find a full timeline below.

How do I find out more and/or ask questions?

Please first read through this FAQ, as we have worked hard to anticipate and answer questions about this process. We will also hold a webinar on Monday, September 14 at 6:30 PM. You can register for that webinar HERE. It will be recorded and made available afterwards. Questions about clergy payroll not addressed within this FAQ may be sent to clergypayroll@vaumc.org.

For specific questions, please consider the type of question to determine who to contact.

Contact your District Administrator for:

- - Questions about the appointment.
  - Questions about individual lines on the Clergy Compensation Agreement.
  - Questions about the new Accountable Reimbursement policy

Contact the Treasurer’s Office for:

- - Questions about the Virginia Conference Clergy Payroll program
  - (804) 521-1104 clergypayroll@vaumc.org

Contact VUMPI for:

- - Questions about pensions/benefits
  - (804) 521-1100

Contact your local church for:

- - Questions about reimbursements for continuing education, travel, parsonage, or housing-related expenses.

When does a church need to tell someone which A, B, or C option they select?

The process naturally begins during the Charge Conference Season. As part of the new Clergy Compensation Agreement (revised summer 2026), churches will select their preferred option by November 30, 2026. This will be affirmed by the Charge Conference and submitted as part of the regular Charge Conference paperwork.

How do we select a Clergy Payroll Option?

The new Clergy Compensation Agreement will contain a space to indicate a Clergy Payroll option. That form must be completed by November 30, 2026. Typically, the Clergy Compensation Agreement will be affirmed as part of the fall Charge Conference session and submitted with the Charge Conference paperwork.

What if my church doesn’t follow the typical ‘fall’ charge conference schedule?

If your church follows an alternate Charge Conference timeline, please ensure that your information has been updated via the Clergy Compensation Agreement in Unity by November 30, 2026.

Whose responsibility is it to ensure this has been handled?

Every church must make a Clergy Payroll designation by November 30, 2026, via the means noted above. District offices will follow up to ensure this step has been completed via their offices.

Can we make a different choice later? (Can we change our minds?)

Yes. At another Charge Conference the church may elect another option for payroll processing. This can take effect at either an appointment change or the start of a calendar year (whichever is earlier). With this, the clergy will still receive the minimum number of W-2’s and allow for a seamless transfer back to the church.

If a church later decides they would like the Conference to process the pastor’s payroll, it would take a Charge Conference action, which would be scheduled with the District Superintendent.

Is a Charge Conference required to affirm and solidify our selection?

Because the selection will be made via the Clergy Compensation Agreement, which requires charge conference approval, a charge conference is necessary to solidify the selection.

Is Accountable Reimbursement Affected and How So?

You can find information about Accountable Reimbursement HERE.

In the Book of Reports September and October dates were mentioned. Why have those dates shifted?

While we have begun onboarding some early adopters, we recognize that most churches will have their Charge Conferences between September and November. To make the process easier for the majority of churches, we have shifted the timeline since the Charge Conference is an easy and natural place to make and affirm the payroll selection.

Churches that would like to shift their clergy payroll to the Conference Clergy Payroll prior to January can do so by contacting the Treasurer’s office at clergypayroll@vaumc.org or calling 804-521-1104.

The new Clergy Compensation Agreement has limits on the housng exclusion. Why?

Clergy are eligible to elect a housing exclusion up to the total of their salary and housing allowance. Per IRS rules, you cannot exclude more than your total taxable income derived from this appointment.

For Churches Selecting Options A/B

Click on the question to view the answer.

If we are to keep our current system, do we need to take any action?

ALL churches must make a selection via their Clergy Compensation Agreement by November 30, 2026. If your church is maintaining its current option and it falls into one of the three approved categories (A: Paid Professional Staff Member, B: Outside Payroll Vendor, or C: Virginia Conference Clergy Payroll), the Clergy Compensation Agreement still needs to be completed following the process outlined above.

If your current option does not fall into one of the three approved categories, your church must select and move to an approved option.

When do we need to decide?

ALL churches must indicate their payroll option on the Clergy Compensation Agreement by November 30, 2026 following the process outlined above.

What is the difference between the Clergy Compensation Form and the Clergy Compensation Agreement?

The Clergy Compensation Agreement is the new form in Unity for all appointments as of January 1, 2027. This will include the payroll processing election made by the church and will also have the clergy salary, housing allowance, employer benefits, and housing exclusion amounts. The new form replaces the current Clergy Compensation Form and has similar information.

The Clergy Compensation Agreement is designed to clearly communicate the actual total employer cost to the local church and in multi-point situations how much each church agrees to contribute.

For Churches Selecting Option C: Virginia Conference Clergy Payroll

Click on the question to view the answer.

What is the timeline?

The process begins now and continues through Charge Conference Season. You can find a full timeline HERE.

In the Book of Reports September and October dates were mentioned. Why have those dates shifted?

Churches that would like to enroll their clergy payroll in the Conference Clergy Payroll system prior to November 30, 2026 can do so by contacting the Treasurer’s office at clergypayroll@vaumc.org or calling 804-521-1104.

What payroll company will the Conference be using?

The Virginia Conference Clergy Payroll will be administered using ADP Workforce Now.

When will the first paycheck come?

The first paycheck using the Virginia Conference Clergy Payroll program will be issued on January 5, 2027.

What is the payroll schedule?

Clergy will be paid twice a month on the 5th and 20th. You can find a complete schedule of payroll dates HERE.

Is there direct deposit?

Yes. A clergyperson can select either direct deposit or a mailed check. We encourage clergy to use direct deposit and ADP Workforce Now will guide them through entering the required information information. Checks will be issued and mailed on scheduled paydays, but arrival time will vary because of the USPS.

We have decided to enroll in the Virginia Conference Clergy Payroll program. What happens now?

Step 1: Make your selection via the Clergy Compensation Agreement in Unity.

- Affirm and submit this via Charge Conference.

Step 2: Clergy will receive a Welcome email from ADP to begin the Onboarding process. To complete this, you will need personal information such as:

- Social security number
- Address and phone number
- I9 information
- Direct deposit information (optional)
- Emergency contact (optional)
- Income tax elections (optional)*

Step 3: Be prepared to complete the I9 process with a member of the Treasurer’s office prior to December 15, 2026. This is the verification of employment and will require the necessary documentation and should take approximately 10 minutes.

Step 4: The Treasurer’s office will enter your payroll information, including benefit elections.

Step 5: Check your first paycheck on January 5th, 2027, and ensure all is in order.

Who has access to my payroll information?

Salary and housing allowance are not confidential. The Conference Treasurer’s Office, VUMPI, and the Unity database manager will have access to the information to process payroll.

Who can make changes/updates, and how often can they be made?

Changes to employee benefits are coordinated with the VUMPI office according to their policies. If there are tax or bank account changes, they are done via self-service in ADP Workforce Now as needed. Compensation changes flow through the Charge Conference process in Unity. Clergy can make changes to their retirement contribution elections at any time through the Wespath Benefits portal.

When/if we have questions about the setup process or during the year, how do we get those answered?

You can email clergypayroll@vaumc.org or call 804-521-1104

How quickly can we expect a response?

Within 48 hours.

How is confidentiality being handled?

During the onboarding process, clergy enter their personal information such as social security number and direct deposit information directly in ADP Workforce Now.

Conference payroll staff is E-I-9 certified and remains in compliance with Homeland Security for all I-9 guidelines.

We want to give our pastor a Christmas Bonus or Love offering. How do we do this within the Virginia Conference Clergy Payroll system?

The church S/PPRC chair will enter the bonus/love offering in Unity. The treasurer’s office will be notified automatically via Unity, and the bonus will be added in the following payroll.

We want to give our pastor a raise. How do we do this?

The S/SPRC chair of the church will enter the new compensation in Unity and approved by the Charge Conference, and District Superintendent, as is currently the practice. The treasurer’s office will be notified automatically via Unity.

Help us understand how this affects estimated taxes.

In the Book of Reports, it said clergy can have the option of having tax withheld by the conference, which will offer them the opportunity to no longer have to pay quarterly federal and state estimated taxes, and even to receive tax refunds. What do we need to do to qualify? And when do we stop paying estimated taxes?

Clergy are responsible for estimating and paying Social Security and Medicare, just as they do now. Clergy will have the option to either pay estimated taxes or have Federal and State Income tax withheld from their paycheck if they choose so in the Onboarding process in ADP Workforce Now.

What about other expenses/reimbursements that were previously handled by our volunteer/staff treasurer (such as continuing education)?

These expenses remain at the local church level.

The church typically reimburses the clergyperson for certain bills, such as utilities. Who handles that within this new system, and what is the reporting mechanism?

These expenses remain at the local church level.

After enrolling, are we able to unenroll and return to option A (paid professional staff person) or option B (outside vendor)? And if so, how do we do that? And how often/when?

Yes. At another Charge Conference the church may elect another option for payroll processing. This can take effect at either an appointment change or for the start of a new calendar year. With this, the clergy will still receive the minimum number of W-2’s and allow for a seamless transfer back to the church.

Upcoming Webinar Series

Clergy and laity are invited to come and hear about important tax information, the new Virginia Conference Clergy Payroll, accountable reimbursement, and so much more! 1 C.E.U. is available for those who attend all four sessions, buy the book “The Clergy Tax Trap” by the Rev. Bill Davidson, and write a reflection paper.

Cost will be:
$15.00 for those attending not in need of C.E.U.’s
$25.00 for those attending in need of C.E.U.’s (will include purchase of the book)

Registration and Details to come!

Note: this webinar series is separate from the September 14 Q&A. There is no charge to attend the informational webinar on September 14.

PRE Annual Conference Information

Considerations for a VAUMC Single-Payer System

How We Got Here

At the 2023 Virginia Annual Conference session, a lay member shared a concern about the financial well-being of our clergy, which led the Conference to vote to increase minimum salaries for Virginia Conference clergy.

Out of that same concern, a second motion passed that created the Just Compensation Task Force, which studied housing allowances for clergy and made recommendations to create consistent and equitable practices for setting them, and further suggested that conference commissions related to advocacy, Clergy Excellence/Board of Ordained Ministry, Equitable Compensation, Council on Finance and Administration (CFA) (and others as deemed necessary) be included in the study.

At the 2025 session of the Virginia Annual Conference, the Just Compensation Task Force reported on its second year of work. This report included a recommendation for “the Conference Council on Finance and Administration (CFA) in consultation with the Office of Pensions and Benefits (VUMPI) study the possibility of creating a system in which the Virginia Conference UMC would administer payroll processing and tax related reporting for all clergy appointed to local churches within the Conference.”

Upon receiving this recommendation, CFA diligently and immediately explored the feasibility of creating a single-payer payroll system for clergy appointed to local churches in the Conference. Different payroll systems were considered, as were issues of cost and capacity for this very important work. Learnings gleaned from processing payroll for district/conference staff were gained. All of this was done with the clear goals of caring for our clergy as well as freeing the laity of local churches to participate in ministries that engage their communities.

Opportunities Provided by a Single-Payer System

A single-payer payroll administered by the conference will:

ensure that clergy compensation is consistently paid on time.
That the complex system that characterizes clergy taxes will be managed accurately and appropriately.
Clergy can have the option of having tax withheld by the conference, which will offer them the opportunity to no longer have to pay quarterly federal and state estimated taxes and even receive tax refunds.
Local church treasurers will no longer have to learn how to complete clergy W-2s.
There will be a single location at the Conference center for both clergy and local church treasurers to call for answers to their questions about the mechanics of clergy payroll.
Our clergy who are navigating our nation’s immigration system will have much easier access to the H1-B visa status without being subject to limitations of the H1-B cap.
Clergy will be able to move to new local church appointments without their employer changing, which is of special benefit to our immigrant clergy whose immigration status is often tied to their employer of record.
Clergy will not need to complete a new I-9 form when they move to a new appointment.
The treasurers of local churches will not need to learn how to do payroll to serve their local congregation.

Questions for Consideration:

Is this change intended to shift more financial responsibility to the Conference, and how will it affect our local church?

A: The broad goal of a single-payer payroll system is to make sure clergy payroll is consistent and accurate while easing the workload of local church treasurers.

Will my church no longer be able to set our pastor’s salary? Is this the conference moving towards a system of clergy compensation where all clergy are paid the same?

A: No. Doing this would be a violation of our church’s polity. Per ¶252.4.d of The Book of Discipline of the United Methodist Church 2020/2024, it is the responsibility of the church council to “recommend to the charge conference the salary and other remuneration of the pastor(s) and staff members after receiving recommendations from the committee on pastor-parish relations (staff-parish relations). Same goes for clergy housing (see ¶252.4.e).

What happens if my church cannot afford to pay the pastor’s salary?

A: This would be an issue for your church regardless of who was doing its payroll. However, with the Conference acting as a single-payer, the appointed clergy would still be paid on time while your church’s district superintendent worked with your congregation on a solution to the root cause of this situation.

Is this for all church staff, or just the pastor?

A: This is for clergy under appointment to local churches. Lay staff, including lay supply, would still be paid by the treasurer of the local church. However, since the clergy would be paid via the Conference payroll, the church treasurer would not be needed to deal with complexities such as reimbursements, housing exclusion, and tax concerns.

My church has a professional treasurer on staff. Can we opt out?

A: No. If a church were to opt out, there would be challenges for incoming clergy anytime there is a pastoral change, since they would now have two W-2s their first year. This would also provide an additional hindrance to our immigrant clergy who might need to maintain their current employer due to their immigration status. Inconsistencies in the application of this single-payer system would ultimately create the kind of inconsistencies and inequities for our clergy that this system is ultimately designed to help prevent.

How is this funded, and is the conference going to simply pull funds from my church’s bank account?

A: No. The Conference will send each church an invoice either by email or regular mail (church’s preference). Each church will have the option to mail a check, schedule a payment online, or have your bank account automatically drafted. For stewardship purposes, the Conference would prefer churches to elect an emailed invoice and one of the electronic payment methods which would save postage costs, personnel time and have a lower carbon footprint.

Isn’t this going to raise my church’s apportionments?

A: No, we do not believe that it will. While there are some costs associated with ADP, the payroll system, we do not anticipate needing additional Conference staff. The Treasurer’s office already is processing payroll and billing clergy benefits to churches so the human steps to the process are already in place. The greatest time demand will be in the months prior to the first payroll when clergy are set up and trained in the payroll system. Most clergy changes after the initial setup will be around January and July 1st, which will be busy times, but having this system will allow for other efficiencies outside the Treasurer’s office.

When would this rollout take place?

The goal would be for this new service to go into effect on January 1, 2027.

Who can I contact for more information?

Email communications@vaumc.org.