Missionary Support – Cost of Living & Taxes

Curtis Home webAfter nearly 40 years of marriage, my wife and I are still amazed at how much consumer goods, housing and taxes go up every year.  Imagine living in a place where the cost of living is 20 … 30 … 40% higher than in the U. S. or housing costs double the U.S. dosts and taxes are higher, too!  What do you do?  Hopefully, your employer tracks all that data and adjusts your compensation to allow you to maintain your standard of living in the host country.

First, let’s talk about the overall cost of living excluding housing costs.

Faith Global Missions subscribes to cost of living tables based on objective data that enables us to adjust support needs based on cost of living differentials.  That means we add a cost of living allowance to the missionary’s support estimate. This is based on the missionary’s spendable income, family size and the cost of living in the host country. This is an adjustment to give the missionary the same purchasing power that his/her salary would give in the U.S.

Second, let’s discuss the cost of housing on the mission field.

In many parts of the world the cost of rent and utilities is higher than at home.  Housing costs don’t necessarily track with consumer prices, so the cost of housing expenses is figured separately from consumer prices.  Faith Global Missions collects this data to have a good understanding of the difference in housing costs.  A foreign housing allowance is added to the base support which enables the missionary to have modest, affordable housing in the host country.

Third, Let’s talk about (YUK!) taxes.  I’m glad I don’t have to pay foreign taxes! Aren’t you?

I’m grateful for all the wonderful benefits we enjoy as residents of the United States as a result of paying our taxes, but I don’t want to pay more taxes than I owe.  Jesus said, “Render to Caesar the things that are Caesar’s, and to God the things that are God’s,” Mark 12:17, so we want to pay the taxes we owe.  Our missionaries often find themselves in situations where they must pay taxes to the country in which they are ministering.  Sometimes these taxes are considerably higher than U.S. taxes.  That can easily add 40% to the salary needs of a missionary.

This tax situation gets very complicated sometimes. Some countries have tax treaties with the U.S., some have social security treaties, while others hav no treaties which means the missionary pays taxes to both countries.  Our missionaries are all obligated to pay the SECA taxes in the U.S.  That is the Social Security and Medicare taxes for ministers.  It amounts to 15.3% of income and there are no deductions. Now add 40% for foreign taxes and may pay as much as 55.3% of his gross compensation in taxes.

In summary, please hear me when I say, “There is no need to feel sorry for our missionaries.”

Try to understand that when a missionary serving with Faith Global Missions tells you he/she needs $7,500 or more in monthly support, that missionary is not living high on the hog.  We just want them to maintain the same standard of living they would have in the U.S.  I am so thankful for Paul’s words as a missionary to his supporting church in Philippi said, “And my God will supply all your needs according to His riches in glory in Christ Jesus.” Philippians 4:19 

Please post your comments and questions here or on our Facebook page at Facebook.com/FaithGlobal.

David Selvey<
David is the pastor of global outreach at Faith Church and the executive director of Faith Global Missions. He serves as a counselor in Faith Biblical Counseling Ministry and teaches in and plans international conferences. David has served as a missionary and worked as a small business owner. He and his wife, Kathy, have lived in Indiana since 1995 and have been members of Faith Church since 1996.