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Formula for the calculation

There is a formula to calculate the value of accommodation for religious ministers to see how much tax they may have to pay.

remuneration x (1 - adjustment) + excess rental

The steps and example below can help you to work it out.

You can find more detailed information about the formula on our tax technical website:

Operational statement OS 21/01

Work out the minister’s total income remuneration for the year

Work out how much the minister received from their employer from 1 April to 31 March. This is not necessarily the same as the minister’s total income.

For example, a minister might get $42,000 total from the church that employs them and from private investment income. Only include the church income in this calculation.

Multiply income by 10%

This is the ‘remuneration’ part of the formula.

For example, $42,000 x 10% = $4,200.

Work out the adjustment

Work out how much of the house is used for work, by floor area. For example, if the minister uses a quarter of their house for religious work, then the adjustment is 0.25.

If more than 1 minister uses the house, split the adjustment between them.

Multiply the remuneration by the adjustment

Use your figures from steps 2 and 3.

For example, remuneration $4,200 x (- adjustment 0.25) = $3,150.

Add excess rental if necessary

The excess rental applies if the accommodation received is more than what is reasonably expected for that minister taking into account their duties and the location where they are performed, rather than what’s simply ‘needed’ to carry out the work.

Put this amount in the tax return

See the example below of applying the formula.

Example of calculating accommodation value for religious ministers

Anareia is an ordained parish priest for the Anglican Church. She serves her parish in the East Cape region. Along with her stipend of $60,000 per year, the church provides her with accommodation in a 3-bedroom house in Ruatoria.

Anareia uses 1 large bedroom as an office to meet with visiting parishioners. The value of the room (based on floor area) is about 15% of the total value of the property. The value of the accommodation provided to Anareia is $16,000 per year. This is in line with her duties as minister and the location where she is based.

As a result, the ‘excess rental’ for calculating the value of the accommodation received is nil.

The value of her accommodation received is:

$6,000 (being 10% of her annual stipend) x (1-0.15) + 0 = $5,100.

Last updated: 17 Jun 2021
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