Ministerial Housing Allowance Determined to be “Payroll Costs”

Ministerial Housing Allowance Determined to be “Payroll Costs”

Ministerial Housing Allowance Determined to be “Payroll Costs”

(April 27, 2020)


CLEVELAND, TN: Since the passage of the CARES Act on March 27, 2020, there has been much debate concerning whether ministerial housing allowance could be included as a part of “payroll costs.” Initially, the Small Business Administration (SBA) resisted providing guidance on this important issue under the Paycheck Protection Program (PPP).


Since ministerial housing allowance makes up a large part of many minister’s compensation, the importance of this issue was stressed to both the SBA and to Members of Congress by different faith-based groups, including the Church of God. Finally, on April 26, the SBA issued an updated frequently asked question (FAQ) document that specifically addressed this issue:


32. Question: Does the cost of a housing stipend or allowance provided to an employee as part of compensation count toward payroll costs?


Answer: Yes. Payroll costs includes all cash compensation paid to employees, subject to the $100,000 annual compensation per employee limitation.


This answer by the SBA clarifies that ministerial housing allowance can be used for calculating the “payroll costs” to get a PPP loan, as well as the “payroll costs” that are used for calculation purposes in the “forgiveness” portion of the loan.


A unified faith-based community was instrumental in getting this favorable result.