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.
As you might expect, most of the lowest paid pastors are those who have the smallest churches. Some receive only what is called a pulpit supply fee of about one hundred dollars a week. They get no benefits like health insurance, car insurance, expenses for clothing or school, and vehicle.s you might expect, most of the lowest paid pastors are those who have the smallest churches. Some receive only what is called a pulpit supply fee of about one hundred dollars a week. They get no benefits like health insurance, car insurance, expenses for clothing or school, and vehicle.