The pastor knows they are not putting it on the agenda to be self-serving, rather they are abiding by the wishes of the board in putting it on the agenda. The median annual budget of churches surveyed was $125,000. I hope this is not confusing to you. This is a primary role of the church board to take care of the compensation of the pastor. And then there’s gender. Since the vast majority of churches in the U.S. are small, the overall compensation package for Protestant pastors is low when compared with teachers and social workers. As such, pastors of churches with congregations of 300 people earn less than $28,000 annually as of publication according to a Crown Financia… This is the minimal start point. A Guide for Determining Pastor’s Salary. The average Pastor salary in the United States is $98,420 as of November 25, 2020, but the range typically falls between $80,880 and $111,536. A pastor's pay depends on the church congregation, and members pay their leaders in a number of ways. Housing Allowance Again, the church board would set criteria that is specific to their church in order to come to a conclusion of where the pastor should be paid. more and more because of the present situation and modern demands of the Millenials. The fair rental value of the home, including furnishings, utilities, garage, etc. The third benefit a church board should provide is annual vacation and sick leave. Then go back and forth until you feel you have a large enough sampling. In all cases, I implore church boards to error on the high side. And for administrative services, a grade-school principal makes $20 per hour. Cancel anytime. It’s nice to make the church aware of this for them to give the pastor notes of thanks for their service. Then I recommend building in an acceleration of this match all the way to a 10/10 match. In this calculation, the church should shoot for a total package compensation of $180,773 but would operate with a range of $157,359 – $180,773. For our pastor in the above example, even though he gets paid $40,000 a year, that’s not what it would say in box 1 of his W-2. These are public employees. When a church goes above-and-beyond in these three areas, they see the Lord’s blessing returned to the church multiplied over again. You just may have to work toward it. The number one reason pastors don't leave to retirement when they should, is they can't afford to. It is worthwhile mentioning again, though, that I recommend targeting the 75-percentile. Again, let’s use our illustration of the 75-percentile point being $100,000. Finally, it would be great to get input regarding other church staff positions. I hope you’ve found this blog helpful in setting the compensation for your pastor. There are couple of things to be cautious of when using these kinds of resources. The best church boards do this with diligence and a great sense of generosity. You’ll be able to move them out the door without feeling like you’re kicking Grandpa to the curb! Another thing, I’ll sometimes hear from church boards relative to compensation is the question, “What’s average?” when thinking of how to pay the pastor. I can tell you one thing for sure; it is almost universal that this is an uncomfortable subject for pastors. In that case, don’t worry. The salaries of pastors in the U.S. is largely affected by church size. I look forward to hearing from you. are paid? In January 2019, it was almost 234. If you’re bringing on a new pastor, then simply put the 5/5 match in place at the outset. With both of these resources, the church is able to determine the 25, 50, 75 and 90-percentile of compensation. How are salaries determined for ministry leaders in your church? Also, many churches use some combination of these factors. A pastor is called of the Lord to ministry, certainly not a high-paying profession. If you’re not a math person, the 75-percentile would mean that 75% of pastors are paid less than the 75-percentile point and that 25% of pastors are paid more than the 75-percentile. Also, go to https://www.churchlawandtax.com/ for more information on this subject. If you change your mind, you can unsubscribe anytime. In other words, in an example where the pastor should be paid $100,000, you want a range of $90,000 – $110,000, not a range of $50,000 to $150,000. 0 to 150 members – $4,800 to $109,000. Fair pay in staff compensation—the largest portion of the church budget—is good stewardship. I don’t necessarily suggest that you have to do this publicly every time you turn around. The church board needs to initiate this. The wise and discerning church board will do all it can to create as tight a range as possible to dial in where their pastor should be paid. Your church’s accurate report of parsonage value helps MMBB determine death, disability, and retirement benefits An accurate parsonage rental value does more than help a pastor save on taxes. So, do this add-on once and you’ll be good to go. in order to obtain a large enough sampling to be confident of hitting the mark. But for others, it’s a stretch to get to the level of generosity they need to be. Another way bonuses really work well is when the compensation of a pastor moves to the higher end of the compensation range of other pastors. In short, the dollar amounts in these areas can be nice but need not necessarily be overwhelming. A pastor’s leadership builds a church’s ministry, and a pastor’s compensation reflects in part a church’s commitment to quality ministry. I encourage the church to be thoughtful in taking care of a pastor and their family during special times of the year. His designated housing allowance would first be subtracted, so it would only say $35,000 in his box 1. Over 1,200 members – $92,255 to $189,053. If the church is a cheapskate in supporting missionaries, it can forget about manifold blessings from the Lord for it to do week-in and week-out ministry. Normally, that turns a lightbulb on in their minds. Here’s another question that comes up frequently, “Are Bonuses Legal?”. Required fields are marked *. With nearly 40 years of ministry experience, Thom Rainer has spent a lifetime committed to the growth and health of local churches across North America. Others will simply say, “If you’re sick, stay home.”. Salary ranges can vary widely depending on many important factors, including education, certifications, additional skills, the number of years you have spent in your profession. Bonuses put money in the pastor’s pocket but don’t increase the base of compensation. Again, as I stated earlier, the way you treat your pastor in this arena of compensation, will in large part determine how the Lord responds to the financial and temporal needs of the church itself. This is an area where the thought is truly what counts. Generosity needs to manifest itself in three areas: missions, benevolence and staff compensation. Yes, I know it is a highticket item but build it into your budget alongside the salary. Determine the starting place for a fair ministry salary by calculating average monthly mortgage/rent in your area and multiplying by four. By far, more churches use the pastor's previous salary as … I recommend starting by creating a 5%/5% matching fund retirement plan for your pastor. For the church board’s information, housing allowance is a wonderful blessing of the U.S. federal tax system whereby, amounts spent on housing for a pastor are exempt from federal income tax. Today, we’re going to dissect the issue of a pastor’s salary and benefits; how to set it and establish the best possible compensation for the pastor. Topping the list is New York, with New Hampshire and Vermont close behind in second and third. Pastoral Compensation This provision of the IRS is to balance against a pastor who lives in a church-owned parsonage. Sometimes a church wants to bless their pastor for something special or as a reward or thank for having walked through a particularly challenging time, such as a major building project. You’re not going to make your pastor rich, but you want to be on the high side of being fair. In doing their research, there are two comparisons of the “Right” salary. I would love to hear from you about these five most common approaches. You want the pastor’s spouse covered in the event of the pastor’s death because the membership of the church will be expecting the church board to take care of the grieving spouse. For example, you might offer a higher base salary if the pastor has earned his Master of Divinity versus only a bachelor's degree. To develop your best strategy for starting sermons. They are intent on really finding the right salary and associated benefits for their pastor. The church pays the utilities (which they should) that amount to $2,800 per year. The wise and discerning church board will do all it can to create as tight a range as possible to dial in where their pastor should be paid. One of the most common questions that I am asked is: “How do churches determine the salary of a pastor?”. Growing churches are led by pastors and church boards that are generous beyond measure. The spreadsheet attachment has used a cost of living calculator to determine what the minimum base salary would be in various locations across the country where ABC-USA congregations are located. And you put it in place in the current year with no need to revisit it in the next three years. Believe me, if you take care of this when a pastor is in their 30s and 40s, you won’t find yourself stuck with an aging pastor you can’t get out the door when they hit their 60s and 70s. The pastor needs to submit in writing their request for housing allowance. So, just because you really did it well last year, you still need to keep coming back year after year to revisit it. On the nuts and bolts of how much to pay the pastor, I recommend compensation for pastor move to the 75-percentile level of compensation of all lead pastors. The business world deals with a similar problem. In this case, doing bonuses can be useful. Let me describe how this works. The National Association of Church Business Administration reported that as of 2012, the average U.S. pastor makes about $28,000 per year. This policy would pay out in event of the death of the pastor to the church and the pastor’s spouse in some proportion. No contracts. When I hear that I typically respond with questions of my own, “Do you have an average pastor?” or “Do you want an average pastor?” The answers to those questions are always, “No!” Board members acknowledge their pastor is above average and that is certainly what they want in their pastor. Vermont beats the national average by 7.5%, and New York furthers that trend with another $6,478 (17.0%) above the $38,041. In other words, if the church average attendance is 750, you’ll probably have to include ranges of 500, 750 and 1000 in order to hit the mark. Because they are public employees, their full compensation is available in City government and School Board minutes, which are open to the public. If you have to add another one, always add on the high end first, not the low end. The pastor’s salary at the previous church. Salary Calculation by: GB This is the only way that I know of to calculate the salary. In January 2019, it was almost 234. Even if it is USA info the separation of income is telling. This is where you have to rebuff the “let’s keep him poor” or “let’s not get carried away, here” mentality. With more online, real-time compensation data than any other website, Salary.com … A starting point for any church board in the area of compensation is to talk about and cultivate a spirit of generosity. The second comparisons made are local to your community. Privacy Policy Terms and Conditions. When putting both sets of results together, this is the compilation which gives you the range from 50 percentile to 75 percentile. Use the current year's total budget (2010) to determine the figure to be used. This comes with the territory of board leadership. Pastor Salary Guidelines. I suggest putting in the minutes that the pastor and the board are to put this issue automatically on the board agenda in the month where you prepare compensation or the month before. The amount actually used to provide a home, or, The amount officially designated as housing allowance, or. But it is important to take care of these special times. I recommend starting a new pastor at three weeks’ vacation per year unless they already have more vacation from their previous church. However, there are some exceptions, such as traveling evangelists who are independent contractors (self-employed) under the common law. Thanks for being with me on this important discussion in caring for your pastor. 501 to 1,200 members – $84,270 to $184,025. Pastor Salary Guidelines. The spreadsheet attachment has used a cost of living calculator to determine what the minimum base salary would be in various locations across the country where ABC-USA congregations are located. How to Figure the Salaries of Pastors Based on the Sizes of the Churches Paying the Pastor. This is a great addition to my post of Feb 2017. The troublesome point (for *me* anyway) was not really determining a preacher’s worth, how much above and beyond that should she/ he be paid so that she/he can afford advanced medical care for a child? The salaries of pastors in … And those in ministry aren't always sure how their pay compares. Here are some other helpful blogs you might find of interest for the pastor and church board member: Click here to get immediate access to this free masterclass. With this standard in mind, if housing costs are $1,800 per month, a starting place for a salary would be $7,200 per month. Whatever you do, don’t start into some commitment of regularity if you don’t have a way to follow through with that regularity. It’s hard enough to get a concise answer on a senior pastor’s job description. A church pays their pastor a salary of $34,000 in 2000. We’d love to invest in you, too! The number one reason pastors don’t leave to retirement when they should, is they can’t afford to do so. Benefits. I recommend the church board set the pastor’s housing allowance on the high side in order for the pastor’s actual expenses to not exceed the housing allowance, in which case they would forfeit the housing allowance tax benefit on that portion higher than the board allocation. You will be unbelievable glad you did! Determine the starting place for a fair ministry salary by calculating average monthly mortgage/rent in your area and multiplying by four. Your church reports this value, along with cash salary and utilities, to MMBB for … Dave Ramsey, argues that a mortgage payment should not exceed 25% of take-home pay. Need a kickstart for your sermon planning? Get creative with this benefit. In that case, go with the larger of the two vacation amounts. After salary and housing allowance are provided for, what benefits are appropriate? A Guide for Determining Pastor’s Salary. Thus, a pastor giving fifteen hours a week to administration merits another $15,000 annually. It is, frankly, a great privilege to be the Lord’s instrument in caring for the financial needs of the servant of the Lord to your church, called your pastor. requirements. How do you define such a vital role? That means in 2019, the pastor’s salary should be just over $48,000 to have equal value. Common Church Staff Salary Breakdown. Just instruct the bookkeeper/treasurer of the decision of the board. If you receive as part of your salary (for services as a minister) an amount officially designated (in advance of payment) as a housing allowance, and the amount isn’t more than reasonable pay for your services, you can exclude from gross income the lesser of the following amounts: Get access to more than 300 videos and training material to level-up your leadership and improve your ministry skills. All told, according to Doug Self’s calculations, the typical pastor should get a yearly salary of about $157,500. You want the church covered because of the potential loss in income with the departure from death of the senior leader of the church. But I’ll tell you that I pray you find all the money you need to help your pastor live better than most. Step 1 Recommended Minimum Salary for 2011 (including Housing)$ 41,000.00 Step 2 Calculate adjustment based on Church's Annual Budget. https://store.churchlawandtax.com/2018-compensation-handbookfor-church-staff-compensation-reports-now-available-at-churchsalary-com/. I recommend that things like nice gift cards for birthdays and anniversaries be given more privately to the pastor and their family. We built ChurchSalary around some of the most important factors in determining fair pay: the role, the church budget, church size, the candidate’s years … 150 to 300 members – $58,357 to $139,000. By far, more churches use the pastor’s previous salary as … Nearly 80 percent of pastors serve in congregations with fewer than 200 people, and 55 percent have fewer than 100 people in their church. Lots of times a church finds itself behind that number. I read them to get some fresh information that will correspond to my To eliminate stress as you begin to write sermons. Now, here is something fundamental for all church boards to remember when fulfilling the task of determining the pastoral compensation. However, housing allowances complicate things. I normally recommend churches do their research with two primary staff compensation resources. Again, like ministry, not noted for being exceptionally high paying… But they are fair and good barometers to get a local comparison. When I became a pastor in 1998, working in a large church with 10 pastors, my church based a new pastor’s starting salary at the same level as the starting salary of public school teachers. Believe me, you’re going to thank me over and over for this recommendation when your pastor starts to near 60 in age. Note: Your church would be a pretty unusual church if you had all the money in the world and could keep throwing bunches of it at your pastor. Average Salary While the Bureau of Labor Statistics lists the average salary of clergy, which includes pastors, at $48,290 annually of 2010, this also reflects salaries of clergy for other religious groups such as Buddhists, Catholics, and Muslims. This may seem like a lot, but you’ll really be unbelievably glad you did this when your pastor starts nearing the end of their ministry. When the church has multiple staff, this becomes a natural part of the review process for all who receive compensation from the church. In this recommendation it means if the pastor will put in 5% of their salary to retirement, then the church board will match it with the church’s funds at 5%. If the CRC in the US does the same to calculating pensions as the CRC dies in Canada then my point is even more valid. Whenever possible put the money in an after-tax retirement account. I would also appreciate input about other ways your church determines the pastor’s salary. It clearly shows the separation between salary and housing allowance. Board member pay attention to this issue. The very first thing a church board needs to do is come to an understanding of pastoral compensation. The pastor's salary at the previous church. A licensed, commissioned, or ordained minister is generally the common law employee of the church, denomination, sect, or organization that employs him or her to provide ministerial services. However, housing allowances complicate things. I was glad to be off that committee. You want this to happen every year to maximize this benefit. This comes naturally for some boards. At the time, I thought it was a bit low, and I complained that this wasn’t fair, because teachers only had to work 9 months and got summers off. It makes a difference who sets the pastor's pay? SAVE NOW, There has been considerable interest on my previous posts dealing with pastors’ salaries. No commitments. More than 25,000 pastors and church leaders are connecting with resources just like this. Manfred Holck, Jr. gives some practical guidelines. All rights reserved. And what is it that professionals in similar work in your community are paid? 5/5 in year one, 6/6 in year two, 7/7 in year three, etc. It would clearly create a hardship on the pastor to have to come up with 5% out of their pocket if they have not been used to doing so at this point. There are two important considerations to keep in mind with respect to staff salaries—the amount of the salary, and the use of "salary reduction agreements." Certainly, the traditional group health insurance options are out there. You have to rebuff the let's keep him poor or let's not get carried away, here mentality. We’ve identified seven states where the typical salary for a Pastor job is above the national … And their annual salary … Yet, they have bills to pay just like everyone else. It shouldn’t be, but it is. Their website is: Using Ministry Pay, here’s a sample of a church in the upper Midwest where I ran the numbers for them; church of 1700 in a city. I am pleased to note that I regularly work with church boards that really want to do this right. Bundles up to 75% off and courses as low as $70! Of course a few high visibility megachurch pastors are making a … As a church plant I know it’s incredibly important to invest in leadership development.”. Always remember, compensation reviews always come around. Bonuses are a great way to do this. 10 Steps to Navigating Change with Your Church Board. With this standard in mind, if housing costs are $1,800 per month, a starting place for a salary would be $7,200 per month. Your church’s accurate report of parsonage value helps MMBB determine death, disability, and retirement benefits An accurate parsonage rental value does more than help a pastor save on taxes. In other words, in an example where the pastor should be paid $100,000, you want a range of $90,000 – $110,000, not a range of $50,000 to $150,000. Even if it is USA info the separation of income is telling. How much does an Associate Pastor make in the United States? I agree with your numbers. Don’t make the pastor have to ask for a raise! I know that’s subjective but that’s where you want to be. Discover the 5 things that will propel you to the next level as you sit down to write your sermons. If you find yourself at $60,000, then I recommend taking the next three years to literally set the pastors compensation for each of those years in advance of when they happen. This might be new for you but literally, if the year is 2019, you can create a chart that sets the pastor’s salary for 2020, 2021 and 2022 right now. So you can rest assured with the clarity you need—whether determining church salaries or evaluating your own. Your email address will not be published. While the Bureau of Labor Statistics lists the average salary of clergy, which includes pastors, at $48,290 annually of 2010, this also reflects salaries of clergy for other religious groups such as Buddhists, Catholics, and Muslims. In this article, I offer the five most common ways churches establish the pay level of a pastor. By far, more churches use the pastor's previous salary as benchmark to establish the new salary. When comparing your pastor’s compensation to your community, I like to make comparison to public employees like the public school superintendent, Police Chief or Fire Chief. An entry-level Senior Pastor with less than 1 year experience can expect to earn an average total compensation (includes tips, bonus, and overtime pay) … The pastor's salary at the previous church. Ministry Pay is a web-based site that allows the board to put in the specific demographics related to the church such as church size, budget, area of the country, etc. Further, when a church cannot follow the admonition to care for the poor and downtrodden, it cannot expect the Lord to come through for it when it is doing other ministry. Manfred Holck, Jr. According to a Duke Divinity School study, connectional churches—such as Presbyterian or Lutheran—pay their pastors more than congregational churches, such as Baptist or United Church of Christ.. Should the pastor’s actual expenses be lower than the amount allocated by the church board for housing, then the difference of the actual and the housing allocation is moved over to ordinary income for the pastor when they do their personal taxes. Normally, pastors receive a w-2 at year end, even though there may not be amounts shown in the federal w/h, state w/h, social security and Medicare boxes. Your church reports this value, along with cash salary and utilities, to MMBB for … In this scenario, with the pastor at $60,000 in 2019, I would set the pastor at $75,000 in 2020, $90,000 in 2021 and $105,000 in 2022. The pastor's salary at the previous church. Therefore, they need to have a provision for the pastor to do so without any infringement on personal vacation time. The consumer price index for the Midwest region in January 2000 was almost 165. Wondering where to start? Salary.com pegs a senior pastor’s range between $78,042 and $107,625. 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It best to approve housing allowance 50, 75 and 90-percentile of compensation grade-school principal makes $ how to determine pastor salary per.... 0 to 150 members – $ 4,800 to $ 139,000 growing churches led. Salary at the previous church four Sundays they have bills to pay just like this some combination these. A mentality of “ how do churches determine the starting place for a pastor?.. Makes $ 20 per hour Share, etc get to the next level as begin. The pastor and their family during special times ca n't afford to weeks ’ vacation year. To your community vacation includes three Sundays pays the utilities ( which they should, is they n't... It makes a difference who sets the pastor to do outside ministry am not a financial how to determine pastor salary so financial! Also appreciate input about other ways your church board to take care of a is! Inflation which will have moved the $ 100,000 figure higher over three years decline. 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Offer the five most common ways churches establish the pay level of generosity they need to help your rich... The compensation for your pastor … and then there ’ s nice to make church! In place at the outset am not a financial advisor so seek financial legal... Improve your ministry skills but for others, it is advisable to get the sufficient sampling size your leadership improve... Church goes above-and-beyond in these areas can be nice but need not be., the closer to a correct number will be paid to your rich. Be charged with remembering this more information on this important discussion in for... Year with no need to be on the pastor will simply say, “ if ’! Add another one, 6/6 in year three, etc high-paying profession to... To setting pastor salaries these days, BaptistStandard.com reports that the national average the definition awkward., in talking about ministry pay and the compensation Handbook for church staff staff positions considered pastor Appreciation at... 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