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Religious practitioners

If your business pays a religious practitioner or religious institution for their services, tax may need to be withheld.

Last updated 9 May 2017

If your business pays a religious practitioner or religious institution for services they provide, tax may need to be withheld.

You may need to withhold tax from payments you make to a religious practitioner for services they perform:

  • in pursuit of their vocation as a religious practitioner
  • as a member of a religious institution.

Payments may include those you have made in the course or furtherance of any of your enterprises.

Defining religious practitioners and institutions

A religious practitioner is a:

  • minister of religion
  • student at an institution who is undertaking a course of instruction in the duties of a minister of religion
  • full-time member of a religious order
  • student at a college conducted solely for training people to become members of religious orders.

A religious institution is a not-for-profit body that promotes religious purpose. The beliefs and practices of the members of that body constitute a religion.

Generally, private schools, private universities and residential colleges will not be considered religious institutions. However, Bible colleges, seminaries and theological colleges may come within the definition of a religious institution.

See also:

  • Taxation Ruling TR 2019/3: Fringe benefits tax: benefits provided to religious practitioners

Types of payments

The type of payment will determine whether withholding is varied to nil.

Religious institution payments

These include payments made from a religious institution to a religious practitioner or another religious institution.

Locum services

If a religious institution pays a religious practitioner for providing locum services, the amount to withhold will depend on the number of days the service has been provided in a quarter.

A quarter is defined as a period of three months ending 31 March, 30 June, 30 September or 31 December.

Table: PAYG withholding for locum services payments.

If a religious practitioner is engaged for:

The religious institution must withhold:

Two days or less in a quarter


Two days initially and is then for a further period in the same quarter

Nil from the payment for the initial two days. Subsequent payments will be subject to withholding according to the tax tables

More than two days continuous in the quarter

An amount from the whole payment according to the tax tables

You still need to issue payment summaries for these payments and include details of the payments and any amounts withheld, including a nil amount, in your PAYG withholding payment summary annual report.

Start of example

Example 1

The minister of a church is on eight weeks annual leave from 1 October 2013. The church engages three different religious practitioners to provide locum services:

  • John is engaged for the first two Sundays
  • Hilary is engaged for the next two Sundays
  • Luke is engaged for the remaining four Sundays.

The church will not be required to withhold any amounts from payments made to John or Hilary, as the periods of engagement are not greater than two days in the quarter.

Payments made to Luke will be subject to withholding. The church will be required to issue payment summaries to John, Hilary and Luke, showing the total amount of the payment and the amount withheld, including a nil amount.

End of example

See also:

Services performed by a different religious institution

If a religious institution makes payments for services performed by another religious institution, tax will not need to be withheld, provided the institution has quoted its ABN, or has an exemption from doing so.

However, in some instances GST may be applicable.

See also:

Non-religious institution payments

PAYG withholding from payments made by a non-religious institution for work or services performed by a religious practitioner, except for chaplaincy or counselling services, is nil.

This may include payments made to a religious practitioner by a:

  • funeral director for the provision of funeral services
  • wedding broker for a wedding.

If the religious practitioner performs chaplaincy or counselling services, tax will need to be withheld if the payment exceeds the following amounts:

On or before 30 June 2016:

  • $100, if paid weekly
  • $200, if paid fortnightly
  • $433, if paid monthly.

After 30 June 2016:

  • $150, if paid weekly
  • $300, if paid fortnightly
  • $650, if paid monthly.


Allowances are separately identified payments made to a religious practitioner for:

  • qualifications or special duties, for example first aid certificate or safety officer
  • expenses they can't claim as a tax deduction, for example normal travel between home and work
  • expenses that may be able to be claimed as a tax deduction by the religious practitioner, for example travel between services at two locations.

See also: