Free tool
Housing Allowance Calculator
A minister’s housing allowance is excludable from federal income tax only up to the lowest of three limits: the amount designated in advance by the board, the actual eligible housing expenses paid, and the fair rental value of the home, furnished, plus utilities. Enter your numbers below and we’ll show you all three — the lowest one wins.
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Know the basics
A few things every treasurer should know
Eligibility
Who qualifies: ordained, licensed, or commissioned ministers performing ministerial services.
Dual tax status
Ministers have a dual tax status: they are employees for federal income tax, but self-employed for Social Security and Medicare (SECA). That means the church should not withhold FICA (Social Security and Medicare) taxes from a minister's pay.
Advance designation
A designation only counts if it is in writing, in advance, by board action. It can never be retroactive — a mid-year designation applies to future pay only.
Reasonable compensation
One more guardrail: the total designated allowance (plus other pay) cannot be more than reasonable compensation for the minister's services. This matters most when a large share of pay is designated as housing — a good question for your tax professional.