WC Payroll Reporting

Important Teacher Housing Updates: New Workers' Compensation Payroll Reporting Rules for 2025-2026 School Year

by Shawn Bubb, MTSBA/MSGIA Director of Insurance Services

As housing shortages continue to impact many Montana communities, school districts are finding innovative ways to support their staff. One such initiative involves providing housing at reduced rates, but this comes with new payroll reporting rules you need to understand.

Understanding the New Requirements

When districts provide housing to employees at below-market rates, the difference between the Department of Labor's established rental value by county and what the employee actually pays must be added to your Workers' Compensation payroll report.

Example Calculation

Consider a district in Beaverhead County that rents a three-bedroom house to a teacher:

  • The teacher uses only two bedrooms as bedrooms, converting the third into an office.
  • The Department of Labor rent value is reduced from $1,307 (three-bedroom) to $933 (two-bedroom) due to only two bedrooms being used as bedrooms.
  • Teacher pays $750 per month in rent.
  • The difference of $183 per month ($933 - $750) must be added to the district's Workers' Compensation payroll report.

Implementation Steps

Ensure your district is prepared for these changes by:

  1. Establishing a tracking system for all employee housing arrangements.
  2. Maintaining accurate records of rental agreements and payments.
  3. Calculating the differential for each affected employee at the start of the school year.

Remember that these values do not run through your regular payroll system. The calculated amount is simply added to your regular payroll values from your school business software system, making accurate record-keeping essential.

School business managers typically know which district staff are affected. Performing these calculations for each impacted employee at the beginning of the school year will streamline the reporting process throughout the year.

For current Department of Labor housing values by Montana county, visit: Value of Employer Furnished Housing

Getting Support

If your business office needs to discuss this Workers' Compensation payroll reporting rule or any other aspect of your coverage, please contact the MSGIA team:

Have a great 2025-26 school year! Return back to newsletter