Housing Allowance and Self-Employment Tax: Worksheet 3

For social security and Medicare, ministers are generally treated as self-employed for their ministerial earnings. The housing allowance — or the parsonage's fair rental value plus any utility allowance — is excluded from income tax but included in net earnings from self-employment (Pub. 517, Worksheet 3).

Worksheet 3, briefly

1. Salary, plus net Schedule C profit from fees.
2. Plus the whole housing allowance (or the parsonage value and utility allowance).
3. Minus the nondeductible Schedule C expenses from Worksheet 2 and unreimbursed ministerial expenses.
4. The result goes on Schedule SE line 2: 92.35% of it is taxed at 15.3% up to the 2026 wage base of $184,500 (SSA), and 2.9% above.

Churches don't withhold this tax, so it's usually paid through estimated tax or extra voluntary income tax withholding. If the IRS approved your Form 4361, your ministerial earnings are exempt.

Last reviewed 2026-10-28. General information, not tax advice. Your tax adviser can tell you what applies to you.