Clergy Ministry

Christians should willingly pay their taxes. It’s in the Bible, Romans 13:5-7, TLB. “Obey the laws, then, for two reasons: first, to keep from being punished, and second, just because you know you should. Pay your taxes too, for these same two reasons. For government workers need to be paid so that they can keep on doing God’s work, serving you. Pay everyone whatever he ought to have: pay your taxes and import duties gladly, obey those over you, and give honor and respect to all those to whom it is due.”

Are you experiencing any difficulties in balancing your church’s clergy ministry taxes? AG Church Consulting can help you eliminate your ministry tax concerns and let you focus on more important issues for your church.

This page is designed to help church administrators fully understand a minister’s tax status and compensate them accordingly.

Ministers Taxes Guidelines

pastor holding a bible

Ministerial tax issues present themselves in complicated, difficult manners. AG Church Consulting offers our assistance to churches and nonprofit organizations by providing our excellent and dependable resources to bring active solutions to the most common tax-related issues concerning churches and their ministers.

If you are a minister, you are subjected to some challenging income tax and Social Security tax rules. We’ll point out essential pieces of information that are needed in your tax concerns such as: How your income is taxed; how to receive an exemption from self-employment tax; how to receive a tax-free parsonage allowance; how to limit your deductions if you get a tax-free allowance; where to report your income and so much more. Learn a lot more from AG Church Consulting on how to keep up with your church ministry’s taxes:

big house If you are a clergy, your earnings for the services you perform in your role as a minister are subject to self-employment tax unless you have requested, granted and received an exemption. This would include the salary that is paid to you as an employee of the church, as well as those offerings and fees for performing marriages, funerals and baptisms. Thus, to be treated as a minister, you must be duly ordained and licensed by a church denomination and have the right to conduct religious worship, sarcedotal functions, ordinances or sacraments.
Clergy (Minister) Taxes
an open bible with a flower on top Housing allowance is considered as the greatest tax benefit made available to church ministers. But ministers could not readily enjoy such benefit because in most cases, this is easily misunderstood. If the church provides a parsonage, then the imputed annual rental value is considered as the housing allowance and the minister pays SECA on that amount. Housing allowances must be allocated beforehand by the church’s governing body, and may not be increased in ex post facto.
Housing Allowance for Ministers
inside a church In most churches, more church money is spent on minister salary than on any other item, making clergy compensation the church’s ultimate financial challenge. Deciding what must be the appropriate salary for clergies can be tricky most especially if you are involved in small churches.
Minister Compensation
money bills Examples of fringe benefits include housing allowances, expense reimbursements, health insurance, group term life insurance, cafeteria plans, retirement plans and so much more. These benefits could be great to your pastor’s compensation, but you need to be more careful in considering such to avoid future conflicts.
Fringe Benefits
a pair of hands calculating on a paper Opting out of social security is only available if the minister is opposed to the receiving of social security benefits due to certain religious beliefs. Before opting out, there are certain conditions that have to be followed for the smooth completion of the said opposition.
Opting out of Social Security
a pair of hands calculating on a paper Withhold income taxes from a minister’s paycheck are not under the church’s obligation. Because ministers are considered self-employed for Social Security purposes, the church does not also withhold or match Social Security and Medicare taxes for ministers.
Estimated Taxes

Churches in the new era have expanded their mission in spreading His teachings – from the norms of sermons to reaching out to people in many different ways. Having minister members is efficient in serving the community, and they too, should be equally compensated. With the growth in today’s church comes the increasing number of participating church clergies, as well as the increasing challenge associated to ministry taxes. On an ever-changing law, does your church have what it takes to keep up with such changes?

At AG Church Consulting, we value your mission and your dedication to realize your cause. Together, we take the same stand in providing your ministers with their deserved compensation. But the challenge along with it should not be your concern. Let one of our consultants help you in maintaining balance and keeping your church’s ministry taxes intact. Over years, we have continuously offered our knowledge in addressing specific issues to church taxes, meeting the distinctiveness of such laws to help churches propagate their missions smoothly. With our dynamism and responsiveness to any of your concerns, we are your efficient partner in eliminating any of your church ministry tax issues.

So speak with one of our church consultants today by calling us directly at 866-203-2527.

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    Advanced Global Church Consulting

    401 - C Main Street
    Laurel, MD 20707

    Toll Free:866-203-2527