How the Clergy Tax Calculator Works
Korea's clergy income tax rules focus on splitting pay into tax-free "religious activity funds" and taxable stipends with generous expense deductions. The U.S. tax code actually has an even more detailed dual-track system for ministers, which this calculator reflects directly rather than reinventing.
First, under Section 107, a properly designated housing or parsonage allowance is excluded from federal income tax up to the lesser of the amount designated, actual housing costs, or the fair rental value of the home -- so it never counts toward your income tax bracket. Second, and often overlooked, that same housing allowance is NOT excluded from SECA (Self-Employed Contributions Act) tax: ministers are treated as self-employed for Social Security and Medicare purposes on their ministerial earnings, even if they otherwise receive a W-2, so the full 15.3% SECA rate applies to salary plus housing allowance combined (after the standard 92.35% net earnings adjustment).
Enter your cash salary and housing allowance to see taxable income for federal income tax purposes (housing excluded), the federal income tax itself, your SECA self-employment tax, and the combined total. This uses 2024 single-filer brackets and the standard deduction as an approximation -- actual liability depends on your filing status, other deductions, and any voluntary income tax withholding your church may offer.
Frequently Asked Questions
For federal income tax, yes. Under Section 107, a properly designated housing allowance is excluded from taxable income up to the lesser of the amount designated, actual housing expenses, or the fair rental value of the home. It is not excluded from SECA self-employment tax.
For Social Security and Medicare purposes, ministers are treated as self-employed on their ministerial earnings even if they receive a W-2 for income tax purposes, so they pay the full 15.3% SECA tax themselves instead of splitting FICA with an employer.