Clergy Housing Allowance Calculator — Minister Section 107 Exclusion

How much of your pay can be a tax-free housing allowance?

Enter your salary, what your church designated and your housing costs. You get the exclusion (the least of designated, actual cost and fair rental value), the income tax it saves, the self-employment tax it does not, a suggested designation for next year, and a resolution your board can adopt. Designating too little leaves tax-free money on the table; designating too much is taxable.

Calculated in this browser tab. No account, no upload. The example is made up. A planning estimate, not tax advice.

1. Your housing and pay

Your housing

Cash salary for the year, not counting the allowance ($)

Housing allowance designated by the church ($ a year; utilities only for a parsonage)

Fair rental value, furnished, with utilities ($ a month; the parsonage's value if you live in one)

Unreimbursed ministry expenses ($ a year, for the SE tax estimate)

Cushion on next year's suggestion (%)

Federal income tax bracket (%)

State income tax rate (%, optional)

Social Security wage base ($, check the current year)

One housing cost per line: label, amount, month or year. Count rent or mortgage payments, property tax, insurance, utilities, repairs and furnishings. Do not count food or household help. For a parsonage, list only the utilities you pay.

Housing costs

Enter your numbers or load the example, then click Calculate my allowance.

The arithmetic, and what it leaves out

Own or rent: the income-tax exclusion is the smallest of the amount designated in advance, the housing costs you actually paid, and the fair rental value of the home furnished with utilities.
Parsonage: the fair rental value of the church-owned home is excluded, plus designated utilities up to what you paid.
Income tax saved is the exclusion times your federal and state rate.
Self-employment tax: 92.35% of salary plus the exclusion, minus unreimbursed ministry expenses, then 12.4% up to the wage base and 2.9% on all of it. Additional Medicare tax is not included.
Not modelled: exemption from SE tax by Form 4361, the half-of-SE-tax deduction, retirement plans, state rules that differ from federal, the Additional Medicare tax, and any year-specific limits. Wage base default is a planning figure; check the current year.

Common questions

How is the minister's housing allowance calculated?

The income-tax exclusion is the smallest of three numbers: the amount the church designated in advance, the housing costs you actually paid, and the fair rental value of the home furnished and with utilities. Anything designated above that smallest number is taxable wages.

Does the housing allowance reduce self-employment tax?

No. The allowance is excluded from income tax only. A minister who is treated as self-employed pays Social Security and Medicare tax on salary plus the housing exclusion, so a bigger designation does not lower that bill.

When must the church designate the housing allowance?

In advance, by an official action of the church such as a board resolution or minutes. It cannot be set retroactively, but it can be changed going forward if costs change. Use the resolution template below as a starting point and have your adviser review it.

Can I get a housing allowance if the church gives me a parsonage?

Yes, in a different form. The fair rental value of a church-owned parsonage is excluded from income tax, and the church can also designate an allowance for the utilities you pay yourself.

What housing costs count?

Rent or mortgage payments, property taxes, homeowners or renters insurance, utilities, repairs and maintenance, and furnishings and appliances. Food and household help do not count. Check the IRS guidance for ministers or ask your tax adviser about anything unusual.

Can I still deduct mortgage interest and property tax?

Generally yes. A minister may deduct mortgage interest and real estate taxes even when the housing allowance paid for them. Confirm with your adviser.

Is my data uploaded?

No. Everything runs in your browser tab and nothing is sent anywhere. There are no accounts.

Is this tax advice?

No. It is a planning estimate from numbers you enter. Rules differ by situation, and a tax professional who works with clergy should confirm your numbers.