An Episcopalian doesn't enter the priesthood for the salary and benefits, but in larger dioceses and congregations, a priest can earn a decent living serving his congregation. An Episcopal priest is paid for his services from funds raised directly by the congregation, and a salary often includes additional benefits to provide for healthcare and defray associated business expenses. Compensation rates are decided upon by a diocese following the recommended guidelines established by personnel committees.
Each Episcopal priest draws a salary directly from the congregation he serves. The specific level of compensation an Episcopal congregation must pay its priest is subject to the rules and policies of the entire diocese. Generally, a congregation must also provide for housing and utilities for its priest.
Episcopalian dioceses also mandate specific benefits for congregational priests that must be paid for by the congregation. These benefits include, but are not limited to, pension payments, health insurance and other major medical coverage. Other costs considered to be professional expenses, including car or cell phone use for official congregation business, are often covered by the congregation as well.
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An Episcopal diocese recommends the minimum level of compensation that a congregation must provide for its priest, but congregations are able to go beyond that level if they are willing and able. The Episcopal Diocese of Indianapolis's 2010 minimum recommended salary for priests, including salary, housing and other benefits, is $52,275. Many dioceses have a tiered pay system that differs based on experience or other factors. The salary for priests in the Episcopal Diocese of New York working for less than three years is $36,500 per year. After three years, priests earn $41,700 per year; after 10, $43,800; and after 15, $49,500. The Episcopal Diocese of Washington tiers compensation based on experience and the congregation's income; 10-year priests at churches earning less than $129,000 make $49,496 in salary, while priests with the same experience at churches with an income exceeding $840,000 earn $69,866 per year.
For legal purposes, Episcopalian priests are considered to be self-employed. This requires them to pay into Social Security at the larger Self-Employed Contributions Act (SECA) rate. Congregations may be required to pay the difference between this rate and the Federal Insurance Contribution Act (FICA) rate charged to workers who aren't self-employed. An Episcopal priest's income is also taxed as though the priest is self-employed; any portion of a priest's taxes paid for by the congregation is treated as income and must be reflected on the following year's tax return. The Internal Revenue Service's Publication 517, "Social Security and Other Information for Members of the Clergy and Religious Workers," contains detailed information about taxes and Social Security payments for the clergy.