COLA & Housing Allowance Adjustments

The Social Security Administration announced a 5.9% cost of living adjustment [COLA] for 2022. This is a record jump - the highest in 40 years. The average increase in recent years has been 2.2%. The 2022 increase is in part to due inflation due to the effects of the Coronavirus-19 pandemic. In light of this, churches and non-profits may want to consider adjusting salaries and reviewing housing allowances for ministers. 

For churches and non-profit organizations with a July 1 fiscal year start, you can either look to include a COLA in your budget preparation for the FY23 fiscal year or make a mid-year budget adjustment if your financial health allows for it. Your Auxilio Partner Strategist can help assess your financial position and identify the impacts of a COLA (i.e. salary, taxes, benefits if they are based on salary, etc.)

In addition, ministers should reassess their housing allowance as housing expenses have increased greatly through the pandemic. The PCA publishes these helpful Housing Allowance worksheets for those renting their home and those who own their home. 

As part of the year-end process, we encourage all employees to log into their payroll platforms and update/confirm their home address are correct by 12/31 to ensure accuracy of W2s.