What is Clery-Pastor self-employment tax?
What is self-employment tax?
The self-employment tax consists of 12.4% for Social Security and 2.9% for Medicare (15.3% combined).
Unlike non-minister employees, the church cannot withhold half of the Social Security and Medicare tax from a minister employee’s paycheck and does not have to match any FICA tax as none is held out.
Instead, a minister employee is responsible for paying his own self-employment tax. As a result, the minister employee actually pays twice as much Social Security and Medicare as a non-minister employee.
In most circumstances the amount of the minister’s income that is subject to the self-employment tax includes the base salary, the housing allowance, and the fair rental value of church provided housing, if any.
An example of what a minister could expect to pay in self-employment tax :
32,000 (base salary) plus and an additional $14,400 (housing allowance)= $46,400 times 15.3% =$7048 (Note: This amount does not include the minister's income tax)
The self-employment tax consists of 12.4% for Social Security and 2.9% for Medicare (15.3% combined).
Unlike non-minister employees, the church cannot withhold half of the Social Security and Medicare tax from a minister employee’s paycheck and does not have to match any FICA tax as none is held out.
Instead, a minister employee is responsible for paying his own self-employment tax. As a result, the minister employee actually pays twice as much Social Security and Medicare as a non-minister employee.
In most circumstances the amount of the minister’s income that is subject to the self-employment tax includes the base salary, the housing allowance, and the fair rental value of church provided housing, if any.
An example of what a minister could expect to pay in self-employment tax :
32,000 (base salary) plus and an additional $14,400 (housing allowance)= $46,400 times 15.3% =$7048 (Note: This amount does not include the minister's income tax)
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