A minister's housing allowance (sometimes called a parsonage allowance or a rental allowance) is excludable from gross income for income tax purposes but not for self-employment tax purposes.

If you receive as part of your salary (for services as a minister) an amount officially designated (in advance of payment) as a housing allowance, and the amount isn’t more than reasonable pay for your services, you can exclude from gross income the lesser of the following amounts:

  • the amount officially designated (in advance of payment) as a housing allowance;
  • the amount actually used to provide or rent a home; or
  • the fair market rental value of the home (including furnishings, utilities, garage, etc.).

The payments officially designated as a housing allowance must be used in the year received.

Include any amount of the allowance that you can't exclude as wages on line 1h of Form 1040, U.S. Individual Income Tax Return or Form 1040-SR, U.S. Tax Return for Seniors. Enter “Excess allowance” and the amount on the dotted line next to line 1h.

If your congregation furnishes housing in kind as pay for your services as a minister instead of a housing allowance, you may exclude the fair market rental value of the housing from income, but you must include the fair market rental value of the housing in net earnings from self-employment for self-employment tax purposes.

For more information on a minister’s housing allowance, refer to Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers.

For information on earnings for clergy and reporting of self-employment tax, refer to Tax Topic 417, Earnings for Clergy.


Services that a duly ordained, commissioned, or licensed minister performs in the exercise of his or her ministry are generally covered under the Self-Employment Contributions Act (SECA). This means the minister is exempt from Social Security and Medicare withholding, but the minister is responsible for paying self-employment tax on his or her net earnings from self-employment.

  • There are some members of religious orders, ministers, and Christian Science practitioners who have requested and been granted exemption from self-employment tax.
  • There are also members of religious orders who have taken a vow of poverty that are exempt, and ministers who are exempt because another country alone provides Social Security coverage for them under the rules of a social security agreement between the United States and that other country.