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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
More from Thom
53 Comments
What about the situation where a pastor that is independently wealthy has turned down raises for over 20 years? This I’m turn has driven down compensation. Based on some of the comps our church sits at the above average on the budget and attendance ranges but pays well below average based on those ranges.
I apologize for the miscellaneous typos and grammatical errors. Siri is at fault.
On raises . . . A lot of small churches simply don’t give them, which is part of the “dinosaur mentality.” Inflation is part of reality in America. In most careers, a small raise is a given each year. But if you’re pastor of a small church, your salary is often in the hands of a small, backwards thinking, uncaring little group of ppl. Maybe 3-4. In a church I served, I didn’t get a raise the first year. It was said, “We can’t afford it.” But they spent money on other priorities, which was insane. I had been there for nearly 2 years before they finally gave me a small raise on what was an inadequate salary from the get go. One time some years back, a pastor I knew died. He was a godly, fine man. I saw someone at a restaurant and the lady said, “He (the deceased pastor) never asked for anything.” Which was a poor way to look at it. But the man and his wife often went lacking: their needs. They struggled to pay their bills. Churches ought to do better, but most of them have no concern about taking good care of their pastor and his and his family’s needs. If they pay him some small salary, they feel that’s enough. Then if he asks for a raise or more salary, he’s “worldly,” “not trusting God to meet his needs,” “greedy,” or “in it for the money.” Some of these pastors, when they retire between 68-70, have nothing to live off of during retirement because their salaries were so low when they pastored. That’s bad, inexcusable (unless church truly couldn’t do better).
Wasn’t it the late Paul Powell (Guidestone/SBC Annuity Board) who talked about the four ain’t nevers of ministry–and one of those was, “You ain’t never gonna be paid what you ought”? Not very encouraging. God can make up the difference–but really: should our church members be content with letting Him do that? The late Arthur Flake and his team at the BSSB used to tell congregations who maintained half-time and quarter-time pastors that they would never employ full-time pastors until they developed full-time Sunday Schools doing what they are designed to do. That is a terrific interview question for today’s pastors to ask congregations considering them: “How full-time (well-developed) is your Sunday School?” If the answer is, “Not very,” then either move on or tighten your belt 🙂
When you go into pastoral ministry, you know you’re not going to be able to enjoy, materially, what others have and enjoy. A new furniture set? Out of the question. Nice clothes for your children? Not hardly. Sometimes, it’s a struggle to meet dental needs because dental work is expensive. I enjoy pastoral ministry. I do. But most churches could care less about paying their pastor well. They have “dinosaur mentalities” and believe “it’s okay” for a pastor and his family to struggle. If you’re somewhere and paid well (like $70,000 a year or more), you’re fortunate and in the minority. I realize we’re not to be in ministry for a good salary, but sometimes, legitimate needs (like dental work or your kids’ school related needs, i.e. field trips) go lacking because a man sacrifices to be in ministry. Are churches generous and looking out for their pastors’ well being? The vast majority are not. Just a quiet indictment here. A man and his family shouldn’t go lacking, but many do over a ministry of 30-40 years. “The reward is in heaven, sir.” I understand, but still, there’s no glory in keeping your pastor poor (contrary to the dinosaur mentality). If you’re a pastor, you need to negotiate before you ever go. If not, many churches will not give a second thought to your struggles when you’re finally there. I’m not saying, “Be greedy.” But it’s okay to talk about your needs. I had one church, in an interview, talk salary to me. It was low and I told them I needed to do other work. A lady on the committee balked at this and I knew, for the sake of my family, I didn’t need to go there. Blessings, pastors.
I support the point of this post; please don’t misunderstand my comment.
Just an observation on point number one (and your mileage may vary). When secular companies are approached by employees concerning a raise, the first number referenced is the total compensation package. This total is every cent – every benefit, bonus, etc. I’ve even seen a line item for the coffee in the break room.
All that to say this, it’s getting hard to do anything in this culture that we are in but not of. Not a direct quote but in the context of John 15:19. Understanding this indicates the utter selfishness of the world and your point.
As a pastors wife and also a church staff member and missionary in my own right I have seen one thing that bothered me more than any other in ministry.
The church does not understand its call to take care of their pastor and his family. The see it as a business. Comparing a youth pastor to a teacher or a pastor to a CEO or whatever you want to compare him with, is not Biblical.
The reason we give our pastor money at all is not to pay him a salary and give him a benefits package.
The church is not a business. And the call of the church is to take care of the needs of their leader so that he can be freed up from those worries to serve and lead the church. Churches view there ministry as a business endeavor from the get go have a problem. The pastor in my opinion, if he has a need, the church should seek to address it, if it’s in the “package” or not. I have seen pastors who go to get married and the church wouldn’t give him time off for a honeymoon. I’ve been there when my husband wore a ratty suit and drove a beater car because that’s all we could afford. And I was the one the church women muttered to, complaining that their pastor needed to “look better”.
I am glad that you are addressing this issue. But I think the basis for it is all wrong. The bottom line? Churches take care of your pastor and his family. No if’s and’s or but’s! It’s your Biblical call. And if you don’t, you are in sin.
I wish I could edit my typos, but you get the idea!
I agree. Churches also need to realize that they can’t have it both ways. If they pay their pastor a small salary, they shouldn’t complain if he drives an old car or wears old suits. If a pastor’s salary is so small that he has to have an additional job, then the church should respect his work schedule. I realize some churches are unable to pay a pastor very much, but they need to realize that a bivocational pastor cannot always come at the drop of a hat. He has obligations to his employer just like everybody else.
I pastored in 6 churches full time during my career. In one of those I was associate pastor. That church donated a small amount monthly to my retirement for the two years we were there. In our last church they offered a life insurance policy. I asked them to put it in a retirement account monthly (less than $90/ mo), which they did. I took salary deductions in order to have the church place more in a retirement account. Now retired for over a year, but still serving with great joy. It would have been easier if we had retirement support from all the churches we served. Time is the important factor when it comes to investing for retirement.
Our last pastor received a base pay of around $55,000 + Benefits and Housing, Car, Books Allowances up to $40,000 for about $95,000 Canadian Dollars. I wouldn’t think that is a pittance but perhaps some might disagree.
Churches like that are the exception and not the rule.
My wife and I have wondered about some of this. Two or three times a year we’ll get a bonus gift or love gift from the church, like clergy appreciation day, but at the end of the year, that gift is attached to my w2 form as income. We don’t know the law, but wish the church did not do this.
It is taxable if received from the congregation as a body but not taxable if received from individual members of the church.
Thanks David for the clarification
For what it’s worth: an honorarium, love offerings, speaking fees, etc. are all taxable. Many churches try to help their pastors by claiming a “love offering” not as pay but as a gift. If the IRS finds out it will be ugly – both for the pastor and for the church. Thank your church that they do the right thing – you wouldn’t be happy to be audited and owe back taxes.
I interviewed for a full-time ME position with a First Baptist Church during the ’90s and was told then by the senior pastor that the total annual salary (with no benefits of any kind) would be $25,000. My wife and I decided to follow the congregation’s process and see what God would do. By the time we arrived for the in-view-of-a-call weekend, the senior pastor had talked the congregation into offering $3600 more per year (still no benefits though). I was called, accepted the call, made the move (wife, 2 young daughters, and me) to serve that local church, lived meagerly, and moved back to our home state 5 years later with more than we had left from there with (the next congregation–also a First Baptist Church–paid twice as much, with many employment benefits, but was a major headache almost from day-1).
Growing small group Bible study ministries are the end of churches’ money problems (seriously–try it and see!), and folk like Thom can be the end of pastors’ money problems (after congregations begin to follow his/their advice) 🙂
As a CPA I am privy to many churches compensation of their pastors. Our firm works with many churches and related organizations. People in full-time ministry hold a special place in my heart as they have had an out sized positive influence in my life. I believe that “double honor” is not only a Biblical command but justifiable, given the level of stress that people place on a pastor. People are clueless about how their words can hurt and hinder a pastor. At the same time, many are encouraging and make the pastor’s job so much easier and pleasant.
I see many different types of pay structures. Some are not legal. For example, a pastor has a housing allowance but the church is still withholding social security and Medicare from their pay.
If a pastor is a dual-status minister (ordained or licensed), they are an employee for income tax purposes and self-employed for social security purposes. It is a complicated system, but does allow for a housing allowance to be paid and excluded from income tax.
My advice is to get counsel from someone in your area that understands and can articulate what a dual-status minister is. Many CPAs are not able to understand this and in my experience, there are probably 25-30% of CPAs who have a good understanding of the rules related to pastors and churches.
I agree that the best time to “negotiate” the pay and benefits is at the outset of the pastor’s call to a particular church.
Well, as for me, I am proud that my pastor makes more than me, and I make a decent salary. I must be weird….