Associate Pastors and Housing Allowance

We have an associate pastor who reports to the Pastor as his boss. Can the associate receive a housing allowance?

Currently we give a housing allowance and salary. We take Federal Taxes and Social Security taxes out of his check.

We only withhold these on his salary and nothing on his housing allowance. Is this correct, or because he is an associate he should be treated as an employee for all pay?

Comments for Associate Pastors and Housing Allowance

Click here to add your own comments

May 16, 2012
Associate Pastors and Housing Allowance
by: Anonymous in N C

You have several questions going here, but basically the answers are that church employed Senior Pastors and Associate Pastors are treated the same if they meet the 5 question criteria set up by IRS.

They are treated as employees for income tax purposes and self-employed for social security tax purposes.

The housing allowances for each are NOT included in income when the pastors figure their income tax liability, and housing allowances ARE included in income when he/she figures their Social Security Tax liability.

It should be at the option of ALL pastors whether to have income taxes withheld from their pay each pay period. They can opt to pay their income taxes on their own using estimated quarterly tax arrangements or they can have the church withhold income taxes for them.

More details on your questions can be found at this website under the tab category (to the left of the home page), "Clergy/Minister. Thanks for your questions.

Click here to add your own comments

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

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 =)



Share this page:
Enjoy this page? Please pay it forward. Here's how...

Would you prefer to share this page with others by linking to it?

  1. Click on the HTML link code below.
  2. Copy and paste it, adding a note of your own, into your blog, a Web page, forums, a blog comment, your Facebook account, or anywhere that someone would find this page valuable.