Hourly Employee Housing Allowance

We have a part-time associate pastor who we are looking to convert to hourly (rather than PT salary). Currently, a portion of his salary is allocated as a housing allowance.

Is it possible to claim a HA while being an hourly employee?

If so, how would that work on a regular paycheck? Would the HA be “funded” first & then the rest of the pay toward the remaining hours? If so, what about a (rare, but possible) situation where he doesn’t work enough hours in a pay period to meet the HA level for that period first?

Converting to hourly makes sense for our circumstances in just about every way - except for this possible wrinkle. Any help would be greatly appreciated!

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Housing Allowance for a Hourly Employee
by: Vickey

I am not a tax professional ... so I am going to give you my "thoughts" then recommend a "expert" =)

I would think that the church would have to "designate" a set amount for the year and then pay that "designated" amount every payday (it would not depend on hours work).

Then you could pay him a wage for the hours worked, BUT make sure you check with the state laws and pay him at least minimum wage.

Recommended "expert":

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