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Clergy pay and housing allowance

Clergy members are generally not subject to FICA, but do have to pay self-employment taxes. Housing allowances are not taxable but are also subject to self-employment tax. Holistiplan supports both calculations. 

Members of the clergy enjoy unique status at it relates to income and taxes. While wages are taxable, clergy members are not subject to withholding for Social Security and Medicare. But they do need to pay self-employment taxes on that wage income. Scenario Analysis supports this calculation. 

Additionally, amounts that clergy members receive for housing are generally not subject to income taxes but are still subject to self-employment taxes. 

To indicate that a member of the household receives clergy pay, check the clergy/minister box in the Wages Worksheet. This will reveal three new fields:

  • Gross Clergy/Minister Wages
  • Housing/Parsonage Allowance
  • Excess Housing/Parsonage Allowance

Gross Clergy/Minister Wages: Enter the gross wages that qualifies as minister/clergy income in this field only. Do not also enter this amount in the Gross Wages field. Any amount entered here will be subject to Self Employment Tax instead of FICA. 

Housing/Parsonage Allowance: Enter the minister's housing benefit. This income is generally excluded from federal income tax but subject to self-employment tax. Learn more: IRS Publication 517 

  • Parsonage: Enter the fair rental value of the church-provided home, including utilities.

  • Housing Allowance: Enter the amount designated in advance by the church.

Excess Housing/Parsonage Allowance: Enter the taxable portion of the designated housing or parsonage allowance. This generally applies when the designated allowance exceeds eligible housing or parsonage-related expenses; or the home's fair rental value (including furnishings and utilities). This impacts federal income tax only. The full housing benefit is generally subject to self-employment tax. Learn more: IRS Publication 517

In this example, the taxpayer has $30,000 in gross clergy wages and a $15,000 housing allowance. Note that the Wages Worksheet indicates that only $30,000 of income is subject to income tax:

Holistiplan automatically pushes these income items to a field titled "Minister Income from Wages" in the Schedule SE section of "Other Taxes" to determine the appropriate amount of self-employment tax. 


Note that the "Minister Income from Wages" is a field that Holistiplan has created to support this situation. Users may need to check, confirm and/or delete data in the "Other Self Employment Income" field that has been ported over from a copied return to make sure that income is not double counted, as the system makes use of the "Other Self Employment Income" to allow returns with clergy income to clear.