Can a year end bonus be considered a bonus on housing allowance?

If a pastor is only paid housing allowance but we are able to give him a year end bonus, can that bonus be considered housing or does it have to be considered salary?

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Jan 09, 2018

The Clergy housing allowance is one of the most misunderstood tax laws.
by: Lewis in NC

The answer to your question is no this would be illegal. The housing allowance can be increased during the year,only if foreseen housing expense increases. The bonus you are talking about would be taxable income for this clergy.

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

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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