When a state law conflicts with a federal law, the federal law wins. That, in a nutshell is the doctrine of preemption.
Example â #1 â this pastor receives a cash salary of $45,000 per year and lives in a church owned parsonage with a monthly Fair Market Rental Value (FMRV) of $1600; the annual FMRV is $19,200. The church pays the utilities (which they should) that amount to $2,800 per year.His annual self-employment tax (Social Security) will amount to $9,467 ($45,000 + 19,200 + 2,800 = $67,000 x 92.35% = $61,875 x 15.3% = $9,467) of which the church agrees to pay $6,500 (9.8% of $67,000).. Life Insurance â $100,000 of term life insurance, paid by the church, with the wife as beneficiary â this protects the church and provides for the family upon a premature death. The church can pay the premiums on the policy but only the premium on the first $50,000 is a tax-free fringe benefit.
The salary of a Diocesan Priest usually ranges from between 15K a year at the low end to 30K a year at the high end. If we add in the stipends, and the fact that priests do not pay rent for housing, the range is 20K a year at the low end to 35K a year at the high end.Priests pay taxes on their salary just like everyone else, and the fact that they receive housing from the parish is considered income.here are two types of priests: Religious Order Priests and Diocesan Priests. Religious order Priests are priests who are part of a religious order, such as the Jesuits. They take a vow of poverty and do not directly receive a salary.