Five Most Common Ways Churches Determine Pastors’ Salaries

There has been considerable interest on my previous posts dealing with pastors’ salaries. One of the most common questions that I am asked is: “How do churches determine the salary of a pastor?”

In this article, I offer the five most common ways churches establish the pay level of a pastor. I am offering these five approaches from an informational perspective rather than evaluating them. Also, many churches use some combination of these factors.

  1. The pastor’s salary at the previous church. By far, more churches use the pastor’s previous salary as benchmark to establish the new salary. For example, if a pastor has an income of $50,000 at his current church, his prospective church may offer him $55,000, or a 10% increase.
  2. The previous pastor’s salary. The second most common benchmark to determine a pastor’s salary is the previous pastor’s salary. Allow me to make an editorial comment here. If you are a pastor who has been declining raises for a few years, you could be hurting your church and the next pastor. There could very well be a big gap between your current salary and the compensation needed for the next pastor.
  3. Experience. Simply stated, most pastors’ salaries increase with increasing years of ministry experience.
  4. Education. I have observed this factor decrease in importance over the past 15 years. I don’t see nearly as many churches requiring a doctor’s degree as they did in the past. And I am seeing fewer churches require a seminary master’s degree, though that degree is still important for many churches.
  5. Demographics of church. The specific demographics to which I refer are family income levels. I know one church that used the estimated median family income of its congregation as the base to determine the pastor’s salary. They would then adjust by other factors such as experience and education.

These factors all have their strengths and their weaknesses. I have noted in previous posts some resources that could help your church to offer your pastor a fair salary.

I would love to hear from you about these five most common approaches. I would also appreciate input about other ways your church determines the pastor’s salary. Finally, it would be great to get input regarding other church staff positions. Thanks for your feedback. I look forward to hearing from you.

How are salaries determined for ministry leaders in your church?

Posted on December 6, 2014

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.
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  • Our recently ordained pastor receives $100K in salary and benefits (all housing costs paid or provided)(insurance)(internet)(cable)(retirement plan) and our rural church is slowly sliding towards insolvency.

    There used to be many more members attending, but due to past disagreements, many left leaving the remainder attending to shoulder the load.

    The pastor stated that no attention was given to the budget of the church by the pastor, but now, more attention will be given to it.

    I wish I could have been earning $100K when I first started my career. (or any year for that matter) Sweet.

  • Dr. Rainer,
    The approach I have used (and recommended to the Personnel Teams / Stewardship Teams I have served with is, as follows:

    We utilize the information from the Lifeway Compensation Study to determine the AVERAGE Salary/Housing total for pastors in our state. We gather that information across five variables:
    1. The budget of the church
    2. The average attendance of the church (membership can be skewed, attendance is usually a better gauge for apples to apples comparisons).
    3. The age of the pastor
    4. The experience of the pastor
    5. The education of the pastor

    Once we have the average salary/housing in all five of those areas, we average those five. That gives a truer picture of what salary/housing support should be expected for that particular pastor in that particular setting. It also helps the smaller / mid size church who has a guy with lots of experience / education. In my case, I have over 20 years experience and an earned PhD. A church our size (350 attendance) probably won’t get that level of experience / education if/when I depart. By using the “average of the averages” it helps avoid a pastor having financial expectations for a church that are not reasonable (based on the church’s size / budget).

    Anyway, that is our approach and it seems to work well. We also evaluate the “total compensation” numbers from the Lifeway Compensation Study to ensure we are providing adequate benefits to our pastors.

    Keep up the good work!

  • I approach pastor’s salary a little differently I guess. In the business world, a person is paid based on skill, experience, etc. And they are paid so that the company can, basically, tell them what to do. In ministry, it’s different. A pastor is paid because he is called of God to serve a local body of believers. The salary is not a means of control, but rather is given in order to insure that the pastor is free to be who God has appointed him to be–to give him the freedom to minister to the people without having to worry about providing for himself or his family. It is a liberation, not an obligation. When we determine salary based on skills, experience, what other churches are doing, we are missing the point entirely. The right question is, What provision do we need to make in order to enable and empower our pastor to fulfill his calling. Where an evaluation of a pastor’s skills, experience, job description, etc. come into play is in prayerfully determining whether that candidate is called to serve your church as pastor or not. If he is, then he should be compensated in such a way that he can focus on fulfilling that calling.

    All that said, the church I serve in Northern California as pastor is small (80-90). Half the membership is at or below the poverty line. Our entire annual budget is around $110,000. After 10 years of serving this church, my skill set and experience is pretty broad. Paired with my education level (MDiv) this church cannot provide the median income for our area (which would be around 60/65,000 per year). Concerns about meeting regular bills, fear of emergency expenses cropping up, trying to manage a second job and it’s demands all chip away at my ability to serve my congregation wholeheartedly. I do my very best, but I’m human–even though I’m a pastor. I don’t resent my ministry, but there are times and seasons where the stress takes it’s toll and the church does not get my best.

    If you look at him and his qualifications and determine he is called to serve your fellowship, receive him. If you have received him as pastor, then take care of him–reasonably, erring on the side of generosity–as best you can. In the church, it’s always a two-way street.

    On another note, if you feel your pastor is no longer called, or that the Lord is moving in a different direction–coming from a pastor–don’t use his salary as a means of getting him to move on. Tell him how you see the Spirit directing, and part ways properly.

    …sorry if I’ve rambled Thom. Thank you for your service to the body of Christ!!

  • I think we are missing the mark here. We are examine this like it’s a business instead of a body. When senior pastors with children no longer in the home make 2 or 3x’s of staff members with children in the home we have great unbalance and injustice. All these benchmarks that we have set are ok, as long as these are not the determining factor. What does the Holy Spirit want him to receive as the pastor should be the sole determining factor. Many of the greatest pastors of all time had zero education. Education is good, but should not be the determining factor.

    • Mark Dance says on

      Thanks Bob. Fortunately we don’t have to choose between the inspiration of the Holy Spirit and the preparation of the church and ministers. There are a lot of factors to consider when dealing with such a sensitive subject (salaries), but I agree that God should have the final word, so we should bath it all in humble prayer.

  • Rick Neubauer says on

    My previous church took into mind education requirements and felt that the position of pastor was roughly the equivalent of the average middle school principle’s salary. Now, I should tell you that this was a church of about 160 members in a town with a state university.

  • We used the Church Compensation Handbook by Hammar supporting cost of living and positional worth to our budget (i.e. We used graphic design heavily so we tended to be higher in our compensation for some of those support services).

    • Mark Dance says on

      Thanks Brandon for that helpful reference. I have used that resource too. There is no downside to doing your homework.

  • I know one church that determined that their pastor’s role was equal to that of a school principal and then paid him a matching salary. Unfortunately, that made it impossible to move to another congregation because his salary was too high. He was UMC and they moved him to District Superentendent.

    Our denomination publishes salary guidelines for pastors. While those guidelines are too often ignored, they do help when a church is looking for a new pastor. The guidelines take into account experience and education. Still, I have the only masters degree guarenteed to lower my income for the rest of my life. And I went on to get a DMin anyway.

    The majority of clergy are underpaid and, with the cost of education going up, that is becoming more of a problem all the time. I served as a pastor in the United Church of Christ for 40 years before retiring. To be ordained in our denomination you have to complete 4 years of college and 3 years of seminary. That means you will most likely have student loans and difficulty paying them off. One result of this is that many smaller churches are calling lay pastors who have minimal education. Some of them are quite good but I believe overall this will have a negative impact on our denomination.

    • Mark Dance says on

      Good points Stuart. Indeed these are stewardship challenges that need to be addressed by both the pastors and the churches.

  • Mark Dance says on

    Good point Drew on following up on the pastor(s). I rarely hear of that being done by churches. Most pastors will experience both support and neglect from their churches over time. Thank God for the advocates that God sends and try to patiently equip those who neglect their staff.

  • Lee Mason says on

    When churches consult with me about their minister’s salary I encourage them to consult with their local school board or boards where a church works in an area where there are several boards represented.

    There they can usually get a pay schedule that is based on education and experience. Then I remind the church that the teachers pay is usually based on a ten month schedule and they will need to prorate what they pay the minister. Also I point out that teachers get retirement and health insurance.

    When churches do this the minister usually gets a raise–a big one.

  • I teach at a Bible college. Students often ask me how much they should reasonably expect in a position. It is a tough conversation for most of them especially with smaller churches. I advise each one to go to an interview with a clear and reasonable personal budget already produced. This way there is no guesswork or suspicion on either side. I also recommend that they research the starting salary of teachers/administrators in the local school system. A new college grad with little or no experience probably shouldn’t expect to make much more than a teacher in that community. A pastor with positive experience or who will be leading a staff in a larger church should probably expect something similar to principals in that community.

    • Mark Dance says on

      Excellent advice Chad. Twenty three years ago I negotiated my salary with a pastor search cmt by telling them what my family’s budget was and they didn’t hesitate to bring my salary package up to my budget needs. Not all churches can or will respond that way of course.

    • I would caution one thing on suggesting they should not make more than a teacher.

      A teacher gets paid benefits, health insurance, paid retirement/401k match, SS/Medicare paid into and are not expected to be on call 24/7.

      These as well as mileage to be paid be considered when we use teachers salaries as our benchmark. I say this because at one point I used this benchmark, however recently even using this benchmark and not getting those benefits I have had a teacher tell me I am too highly paid.

  • Too few churches give though to this in smaller cities and towns.

    Questions/ideas that shouldn’t be considered.

    1. How little will they work for? If they will say yes to $-X then lets offer it.

    2. We pay the Lead Pastor x-dollars. The Youth. Kids. Etc….shouldn’t be near that #.

    3. This is what we pay. Factors like family size, competence, and overall need are not considered.


    After salary is established

    1. Check on the Pastor. How is it going? Are you meeting your needs without excessive worry about finance?

    2. Establish a regular increase and not based on percentage. If Lead makes 60k and. Associate makes 40k why should both go at 4-5% and not at a.particular dollar figure.

    3. Don’t lay the burden.of finance on the staff. If a rough couple months go by and the finances are still in good shape don’t mention or bring up the finances as though staff should be guilty or concerned due to income/tithes being down.