how do you calculate what a pastor salary/his housing allowance

Please tell me if this is correct we calculate a pastor's monthly housing multiply it by 12 and that is what his total housing is yearly. If a pastor makes 24,000 a year divided by 12 equal $2,000.00 a month minus his housing allowance $1,500.00 equal $500x12=$6,000.00 as his salary for that year and he needs to file the taxes on that $6,000.00 or does he have to pay the taxes on the housing as well.

I hope this is not confusing to you.

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Feb 19, 2013

Salary Calculation
by: GB

This is the only way that I know of to calculate the salary. I agree with your numbers.

The Pastor would receive a w2 which lists $6,000 in box 1; any federal withholding in box 2; and the housing allowance (labeled as such) of $18,000 in box 14.

It's probably best to follow the w2 preparation instructions given here: https://www.freechurchaccounting.com/example-of-pastors-W-2.html

GOD Bless!

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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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