Attend to your congregation, not payroll
Your ministry’s payroll has special tax requirements that must be handled properly. Here are a few common questions about church payroll services:
What is parsonage?
Parsonage refers to clergy housing. It can either be owned by the clergy person (or held in his or her name), or is owned by the religious organization.
What is a housing allowance?
Housing allowance applies when the clergy person owns the residence (or it’s in his or her name) and the religious organization pays the clergy person a monetary amount to retain and maintain the residence. This amount is in addition to the salary, and it must not exceed the fair rental value of the residence, including furnishings, garage and utilities.
What is housing parsonage allowance?
A housing parsonage allowance applies when the clergy person lives in a residence owned by the religious organization. The value of the residence needs to be reported, as explained in the Clergy Housing Allowance Clarification Act of 2002, Section 107 of the Internal Revenue Code or IRS Publication 517.