Clergy residence

Clergy residence deduction

If your employee is a member of the clergy, they may be able to claim a deduction from income for their residence when filing a personal income tax and benefits return.

An employee who is a member of the clergy, a regular minister, or a member of a religious order can claim the clergy residence deduction if the employee is in one of the following situations:

To claim the deduction, the employee has to fill out parts A and C of Form T1223, Clergy Residence Deduction. You have to fill out Part B and sign the form to certify that this employee has met the required conditions. The employee does not have to file the form with their income tax and benefit return, but has to keep it in case the CRA asks to see it.

For instructions on how to report the housing or utilities benefit, see Housing or utilities.

Reducing remuneration from which you have to deduct income tax and CPP

Employer provided or paid – benefit

If you provide your employee with free or low-rent accommodation, do not include the accommodation and utilities share of the benefit that is equal to the clergy residence deduction, in your employee's income when you calculate the income tax and CPP contributions to deduct as long as your employee does both of the following:

Employee owned or rented – allowance

Your employee may own or rent the accommodation and pay for utilities either out of their own money or by using the allowance you paid to them. If your employee will be claiming the clergy residence deduction on their personal income tax and benefits return, they may get a letter of authority from a tax services office to reduce the income on which you have to deduct tax and CPP. When your employee provides you with a letter of authority from a tax services office, reduce the income by the amount stated in the letter.


Although the clergy residence deduction and the utilities share of the benefit can be excluded from income for the purpose of calculating tax deductions and CPP, you still have to report it on your employee's T4 slip. Special rules apply if you pay for utilities (or provide them) for a member of the clergy. For more information, see "Code 30 – Board and Lodging" in Chapter 2 of Guide RC4120, Employers' Guide – Filing the T4 Slip and Summary.

For more information, see Archived Interpretation Bulletin IT-141R (Consolidated), Clergy Residence Deduction.

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