Those individuals who are ordained or licensed ministers, and whose primary role is one of teaching or professional/administrative, are eligible to apply for a housing allowance. The amount designated as housing allowance is considered non-taxable.

New employees are eligible to apply within 30 days of their start date. Annual re-enrollment is done in late Fall of each year and is effective the following January. All housing allowances must be approved by the Board of Trustees. Applications can be found in the Office of People and Culture.

Ordained or licensed ministers who choose to use a housing allowance are considered self-employed for federal income tax purposes and are covered by Social Security under the Self-Employment Act (SECA). Generally individuals who are considered self-employed are not subject to withholding but must make quarterly deposits for both Social Security tax and income tax.

The self-employment tax rate for Social Security is higher than the rate paid by non-ordained employees through withholding. Bethel makes an annual supplemental payment to self-employed licensed and ordained employees (those with a housing allowance) equal to the difference between the self-employed Social Security rate and the normal Social Security withholding rate for non-ordained employees. This is done each paycheck for the employee. This supplemental payment is taxable income to the employee.

Questions regarding your taxation as an ordained or licensed minister or guidance on paying your quarterly social security and income tax payments should be directed to an accountant or financial planner.

Office of People and Culture

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