Housing Allowance

What Ministers Need to Know

About the Housing Allowance

“The ministerial housing allowance applies to ordained, commissioned or licensed clergy who own or rent their homes. With the majority of clergy living in their own home vs. a church-owned parsonage, the housing allowance is the most significant tax benefit available to clergy.”


The federal tax code provides clergy with a tax exemption on the portion of their compensation that their church employer designates as housing allowance.

IRS: Earnings for Clergy

"A licensed, commissioned, or ordained minister who performs ministerial services as an employee may be able to exclude from gross income the fair rental value of a home provided as part of compensation (a parsonage) or a housing allowance..."

Designating a Housing Allowance for 2023

"The housing allowance is the most important tax benefit available to ministers. But many ministers do not take full advantage of it because they (or their tax adviser or church board) are not familiar..."

Five Biggest Tax Mistakes Made by Pastors

"Ministers who live in church-provided housing often miss out on the tax benefit provided by a housing allowance. Many ministers do not understand that a housing allowance can and should be..."