Is it true, when a minister files his yearly taxes, he pays Social Security & Medicare taxes on his salary dollars as well as his housing allowance?
You are correct. As a combined 15.3 percent tax, called self-employment (SE) tax, ministers calculate the tax on Schedule SE and include the tax payment along with their Form 1040 filing.
Some are not aware that the amount subject to the tax ("SE income") can be reduced by unreimbursed employee business expenses (Form 2106). Also, elective deferrals to a IRC 403(b) reduce SE income. Qualifying employee health benefits are also exempt.