How Not to Compensate Your Pastor

When I converse with church members who have responsibility for overseeing pastoral compensation, I can expect a few typical reactions. First, the members speak in hushed tones, as if the subject of compensation is a forbidden public topic, only to be mentioned in the confines of need-to-know and confidentiality. Second, I will run into one or more misconceptions about pastor’s pay. Third, I often hear from at least one person who has a very unreasonable attitude about the topic.

In that context, I hear six very common negative themes about pastoral compensation. I wish they were not repeated, but they are. See if you have heard any of them. Let’s look at the six ways not to compensate your pastor.

  1. Don’t use “pay” and “package” synonymously. A pastor’s pay is salary plus housing allowance. That’s it. Nothing else. The pay is not health benefits or retirement benefits; those are, obviously, benefits. The pay is not automobile expenses reimbursed. That is an expense reimbursement. Let me give you an example in the secular world. An employee gets a paycheck of $50,000 a year. The same employee gets $4,000 in medical benefits and $3,000 in retirement benefits. And the employee was reimbursed $4,000 for a conference in California. How much does the employee make? $50,000 of course. You don’t add benefits and expenses and call it pay. That’s the total package, but not the paycheck. Articulate your pastor’s pay with that same vernacular.
  2. Don’t keep the pastor’s pay low to keep him humble. I’ve heard that excuse too many times. It’s a fake spiritual way to justify low compensation. If any of you church members like that approach, try lowering your own compensation for the sake of humility.
  3. Don’t count the spouse’s income as part of the pastor’s income. I did a consultation with a church a few years ago where the pastor’s compensation was lower than two other staff members. I asked the obvious question regarding the strange discrepancy. The chairwoman of the personnel committee told me the pastor’s wife had a good paying job as a nurse, so they did not need to pay the pastor much. I almost choked on my Chick-fil-A sandwich.
  4. Don’t fail to contribute toward retirement for your pastor. Too many pastors have insufficient funds in their later years. Too many churches neglect contributing toward their retirement.
  5. Don’t fail to find sources that have pastor and staff salary data available. There are a number of such studies published annually. You have no excuse not to find the information that will help you compensate your pastor fairly. Here is an annual study by LifeWay for my denomination.
  6. Don’t neglect raises. Inflation may be low, but it’s still present. When you fail to give a raise to your pastors every year, they are actually falling behind in purchasing power. Insist they take an annual raise, even if it’s only cost-of-living increases. And, hopefully, it will be even more.

As a postscript, don’t let the abuses of money by a very few pastors give you a false perspective. More pastors are underpaid rather than overpaid. And most pastors would rather not broach the topic of their compensation. It’s just too uncomfortable for them.

So, please, take the lead and take care of your pastors financially.

That will be one less burden they have to carry.

Posted on February 11, 2019

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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  • Kurt Michaelson says on

    When I served as a pastor of a small church in Southeast Texas, I had a decent salary that met our financial obligations, however, the church did not provide a much needed health insurance plan for my family. At one point they were willing to share half the cost through Christian Healthcare Ministries, but this would have added an additional expense that would have squeezed out the remaining money we had each month.

    During my 2 year tenure there, there was not an opportunity to save for retirement and probably never would be, had I remained there as the pastor for the next 15-20 years, as I had hoped.

    Following my unfortunate dismissal after Hurricane Harvey in the summer/fall of 2017, I received a letter (1/2018) from the denomination’s national office requesting financial support to the organization’s Aged Ministers Assistance Fund because there were many pastors who had not saved any money throughout their career because they thought Jesus would return before their retirement began. Now, they’re struggling to make ends meet and the letter asked if I could help in some way and I couldn’t.

    Receiving that letter created a realization for me that as much as I’d love to return to full-time pastoral ministry, I can’t mainly because of my family’s need for health insurance coverage and I don’t want to live off of a meager social security income and not be able to provide some financial help to my children when I’m in the retirement stage of life. I don’t want to be part of the statistic in a future letter when I’m 72 and the letter is writing about with me as one of those ministers who are in need of financial assistance.

  • Alan H. McLeod says on

    There is another dimension that I have recently understood after temporalily taking over the church treasury function. Pastors are treated differently from a tax point of view. Pastors are treated as self-employeed and have to fully pay self employment social security and medicare, which is twice the rate of a normal employee in secular company. This makes pastor compensation a very involved subject without enough transparency in my opinion.

  • As a Worship Pastor’s wife and current church Secretary/Receptionist/All around office of one, I would ask how you recommend the church publish the salary reports as part of the budget process. Currently our pastors’ package total is the only line reflected on the budget so it makes it hard for us to explain that we have to pay health insurance and retirement out of that number. Getting them to change … well, let’s face it – any change is hard, even something that should be simple.

  • I think it is important that pastors, for lack of a better word, negotiate some of these items before they come to the church. All pastor should see the compensation package total, and breakdown, before coming in view of a call. The church I serve presented a fair package of compensation to me, but it did not include a retirement contribution. Upon receiving the information, and after careful consideration, I requested the contribution before I went in view of a call. They were happy to oblige. A pastor’s biggest window for any negotiations is in the pre-calling phase. Once you accept it, most people in the congregation simply do not think much about it. I believe that most churches, not all, but most, would want to better their pastor if they knew of the need. But if, as stated, most in the congregation simply don’t think about it, and most pastors are very reluctant to bring it up, it never gets discussed and the pastor often carries an unnecessary burden. Again, I think this is most cases, but not all. Pastors, negotiating pay and benefits is not sinful, unless it is motivated by a greedy heart. Do so before you accept the call if the pay and/or package is not adequate. If the church is unwilling to negotiate before you come, chances are they will not after you come either. Do everything in prayer and wisdom

  • When I went to my first church out of seminary, I decided to accept whatever compensation was offered and never say anything. When I went to my second church, I decided to accept whatever they offered and to always clarify any misconceptions I heard. When I moved from a church-owned parsonage to my own home, some objected to paying a housing allowance and asked, “Why should we pay for your house? Our employer doesn’t pay for our house.” Clarification was needed! When total compensation (included professional expenses and benefits) was talked about as if it were salary, clarification was needed. Good news: I pastored that church for 36 years.

  • Eric Luedtke says on

    Number 6 has reared its head often in my career.

    I’ll add number 7, which I’ve heard in multiple calls … “why should we give the pastor that benefit, I don’t get that benefit in my job” or related, retired people who say “I never made that much money a year and I worked X job for 35 years!”

    • Joseph Willmouth says on

      Yup! I have heard this one several times — along with the rest of the list. I have a pastor friend who told his church if they didn’t give him a raise he would have to get a part time job at the school — their response to him was, “go ahead and get the job and consider that your raise.” The real issue in all of this is a heart issue — churches who ignore God’s Word also ignore their pastor’s needs too.

  • Hello my brother
    This problem of pastoral congruences is everywhere, even in the most affluent churches. Inflectually even in these a vast majority of presbyters and ‘lord’ believe that they deserve to have a pastor with many qualifications and specializations and masters and doctorates abroad, but these even believe that they can pay little for these same pastors.
    If among the “great” pastors there is that, that is, in the “high clergy”, where are the “famous preachers and theologians” of the denominations, think in the middle of the “lower clergy” among the famous, Who? .
    In Brazil the thing is worse, increasing inflation, systematic devaluation even among the traditional denominations (Baptists, Methodists, Presbyterians, Anglicans, etc.).
    We are often defrauded of our rights here. Many churches withhold payment of their shepherds’ benefits, such as retirement aid (8% of the pastor’s allowance), social security (50% is the church’s duty to pay, another 50% is the minister’s), my denomination has a minimum floor equivalent to $ 1,340.50 US), and housing, (many churches do not have a parish house, they pay rent, hence the move, the councils vote a small amount, enough for only a small house, if the pastor does not fit in the house to pay the rest of the rent), there is no health insurance plan (the church pays if you want, and in 95% of the cases do not want), cost help (rarely paid, maybe only for a part of the fuel), vacations (payment not required, paid if you want), here we have in the country a call 13th, for the workers (not to set up a bond, the church changed its name to “gratification for the pastor’s day, and it is paid in December, if the church wants, it is not obligatory).
    In sema, if in the US it is complicated, with a more mature church, here in Brazil is much more.
    I have a cause running in church court for more than 2 years, where I revoke the payment of my social insurance for 2014, 50% of the unpaid church and 8% of my unpaid retirement aid in 2014, I also request payment of amounts unduly cut off from our health leave in 2017, which we had by the rule of full-maturity church, but the presbytery cut 35%. Today this value adding up the interest and delays gives around $ 5,500 US. All awaiting judgment of the High Council of the Church. Laziness is the rule here. They often act this way to forget the case and pastor. Meanwhile, I and my family need health, work, emotional, spiritual … It’s brothers, it’s Brazil. Land where the leniency of the State permeated the Church and the salt has been rendered tasteless. And this because I am of a denomination that is seen by some with the ‘bulwark of seriousness’ in the question of the purity of the gospel. Imagine if it was not.

  • Thank you for this blog post! It is very necessary.

    There are churches out there that do want their pastor to be appropriately compensated. I’ve served at a church for almost 13 years. They pay me generously and pay for my health insurance and substantially fund my retirement. In all those years, I have never experienced a problem.

    If you are a church member reading this, I strongly urge to make sure your pastor(s) are well compensated. They are worthy of double honor. Most pastors I know are sincere, prayerful, hard working and love their church. Please don’t add finances to their list of concerns. You can never go wrong by blessing them graciously and generously,!

  • Christopher says on

    Several months ago I interviewed with a church in a wealthy growing suburb of Dallas. The church was rather small, had been around long before the urban growth, but had obvious potential. When I brought up the issue of housing and if my family could afford a house in the area (there had been no mention of compensation), what had been a very encouraging interview suddenly went cold. That was the last I heard from them. I later found out they hired a man who already lived in a neighboring community and could commute.

  • I have always felt that potatoes should be compensated with packages competitive to their peers in other professions. Financial stability allows them to focus on ministry. Financial instability forces them to choose between their primary ministry (family) and occupational ministry.

  • Larry McCallister says on

    My denomination allows churches seeking pastors to post “unspecified” concerning salary on the national website. And “salary” always seems to mean total package to be divided into salary, expenses, housing, pension, etc.

    • Thanks, Larry. I wish they would not include all benefits and expenses as salary. It’s not clear to church members.

      • I was a teacher and total cost to a district salary and fring bemefits was always published. As a negotiator we often negotiate benefits in place of salary because the state had caps on salary increases. Those fringe benefits made a big difference in the lives of our teachers!

  • Philip Rolfe says on

    Would like to see the link for point 5 if you have it please Tom!?
    Thank you

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