Are health insurance premiums paid by our minister pre-tax?

by Peggy
(Everett, Washington)

We pay 50% of the health insurance premiums for our minister. I know that this is a non-taxable benefit to him. We withhold the other 50% of the premium from his salary. Is this amount pre-tax?

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Jul 02, 2017
Insurance premiums pre-tax?
by: Bill OConnell

Your compensation structure is likely costing your pastor more income tax than is necessary.

If this is a solo pastor plan, it should all be paid by the church and reduce the salary by that 50%. The church spends the same cash, and pastor has a smaller box 1 on the W2 form.

If there are others on the plan look into a tax free QSEHRA.

Call my office at 617-921-9321 to discuss

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Join in and write your own page! It's easy to do. How? Simply click here to return to Fringe Benefits.

If you want to DIY your payroll, I highly recommend you look at using Gusto! It is very user friendly and their support is awesome! Plus they know how to set up and maintain payrolls for churches and nonprofit organizations.

Note: I am a "partner" of Gusto, but as I have told you before ... I never recommend anything that we or our clients have not tried and love =)

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