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.
Thus if a church has a budget of $50,000 then the pay for the Pastor should be $23,000 to $32,000 a year. If the budget is $100,000 then the pay should be $45,000 to $55,000 a year.Again with all things equal, a church of 100 people should give at least $2000 a week.(That's $20 a person which is 8% of minimum wage-which is below the recommended 10% tithe) This would bring a total of $104,000 a year. A church of 100 people should easily be able to pay at least $45,000 for a Pastor.o if the giving is low, his pay should be low. For example: A church of 100 people and each person on the average only gives $5 then they would bring in $500 dollars a week. Thus the Pastors pay will be lower than if the church members gave $10 or $20 or $50 per person. 6.