What Does a Pope's Salary Mean for U.S. Tax Obligations?

Imagine being appointed to lead one of the world’s most influential spiritual institutions and discovering you’re potentially liable for U.S. income taxes. This is precisely the scenario facing Pope Leo XIV, who carries the distinction of being the first American-born pontiff while maintaining U.S. citizenship. Unlike most citizens who work abroad, the Vatican’s leader cannot simply enjoy his compensation tax-free—at least not without carefully navigating complex international tax regulations.

U.S. Citizenship and Global Income: No Religious Exemption

The principle is straightforward: the U.S. government taxes its citizens on worldwide income, regardless of where that income is earned or what institution provides it. While many assume the Catholic Church’s tax-exempt status extends to its leadership, this assumption doesn’t hold up under U.S. tax law.

Edward A. David, an assistant professor at King’s College London’s theology and religious studies department, emphasized this point to The Washington Post: the new pope “is unlikely to be exempt from U.S. income taxes” based on how U.S. tax law operates. Timothy Fogarty, an accounting professor at Case Western Reserve University, confirmed that there is no blanket exception for religious professionals—and remarkably, not even for diplomats or heads of state.

Breaking Down the Pope’s Salary and Tax Liability

The mathematics of a pope’s salary tax burden become compelling when examined closely. Pope Leo XIV receives approximately €30,000 monthly, which translates to roughly $33,000 per month or $396,000 annually. Without deductions or special considerations, this income could generate federal and state self-employment tax obligations totaling approximately $135,287 per year.

This calculation reflects the reality that clergy members in the U.S. are classified as self-employed for Social Security and Medicare purposes, triggering self-employment tax rates that significantly exceed standard income tax withholding.

Potential Deductions and Tax Optimization Strategies

The situation becomes more nuanced when considering available deductions. The pontiff could claim the standard deduction of $14,600, which provides immediate tax relief. Additionally, his compensation for housing—provided directly by the Vatican—potentially qualifies for deduction if properly documented and structured. Housing-related expenses might encompass everything from furnishings to utility costs.

The gray area emerges when classifying a religious leader’s role: is he self-employed, an independent contractor, or something entirely different? This classification directly impacts what business expenses he can legitimately deduct. Properly navigated, these deductions could substantially reduce the net tax burden.

Navigating International Compliance and Offshore Complications

A significant complexity involves the pope’s maintenance of accounts related to his role at the Vatican. American citizenship combined with overseas financial holdings can trigger additional filing requirements. Form 8938, submitted to the IRS, becomes mandatory disclosure when citizens hold substantial foreign financial assets. The Vatican Bank, whose assets exceeded $6.1 billion as of 2023, certainly meets this threshold.

Furthermore, depending on his authority over Vatican Bank accounts—if he serves as a signing authority—he may need to file a Foreign Bank Account Report with the Treasury Department’s Financial Crimes Enforcement Unit. These obligations exist independently of his standard income tax filings and represent potential pitfalls for non-compliance.

The Historical Reality: Most Popes Don’t Actually Accept the Salary

Here lies an ironic twist: while Pope Leo XIV is technically entitled to his substantial compensation, historical precedent suggests he may choose not to claim it. His predecessor, Pope Francis, famously declined to receive his papal salary, effectively sidestepping the entire tax question.

Should the pontiff follow this tradition, the tax problem simply evaporates—no income claimed means no taxes owed. Yet the possibility remains that accepting this pope’s salary would transform him into a taxpayer subject to the full complexity of U.S. tax code, reminding us that even the highest-ranking religious leaders cannot escape the obligations that bind ordinary Americans to the IRS.