Should a Church Show Individual Pastor and Staff Salaries in the Budget?

May 27, 2019

This question comes to the Church Answers’ team and me a few times a month. It often evokes some pretty strong emotions. Can a church member (or, in some cases, guests) look at a church budget and know exactly what everyone on church staff earns?

The tension is between transparency and misunderstanding. On the one hand, transparency is usually a good default posture. Especially in congregational polity, church members have final authority over major decisions. It just makes sense they should have visibility to pastor and staff salaries.

On the other hand, putting detailed staff salaries before all the church members can be a problem for the following reasons:

  • Many church members get confused over the term “packages.” For example, pastors with a “package” of $60,000 may only be making $45,000. The difference is the benefits, such as retirement and health insurance. The package is the total cost to the church. The salary (which sometimes includes housing) is what the pastor actually gets. Many church members view the package as the equivalent of a salary, but it definitely is not. In fact, most church members likely do not know their secular-equivalent package in their vocations. In other words, they do not know the costs of their benefits to their employer.
  • Visibility of a specific salaries and benefits of pastors and church staff can create tensions among the staff. Can you imagine what it would be like if secular employers posted all the salaries of their employees each month?
  • Church members may view the specifics of staff salaries and compare them to their own compensation. That too can be a source of tension.

For these reasons, I lean toward not including specific compensation in a budget that is made available to church members on a regular basis. Depending on church polity, a possible approach to the transparency/misunderstanding tension would be:

  • Include total salaries in a single line on the budget.
  • Include total benefits in separate line items on the budget. These benefits could be segregated by their respective purpose: health insurance, retirement, etc.
  • Show expense reimbursements, such as automobile expenses, as separate items. They should not be included as either compensation or benefits.
  • Have a system in place where church members can view individual salaries by appointment, such as meeting with a member of the personnel committee, elders, or specific group responsible for personnel issues.

To be clear, every church is different, and the polity of a church may be the determinative factor in how these matters are handled. Because we get similar questions quite often, we thought this approach might be helpful for some churches.

This issue usually generates some lively discussion. Let me hear from you.

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84 Comments

  • No, they should be disclosed. It’s part of a church’s stewardship responsibility concerning our common mission. Especially since some churches require members to tithe and, in some cases, disclose income upon membership. We just have to understand it properly on both sides. While total compensation is not the same as base salary, it’s not an apples to apples comparison. In our church, the pastor receives full retirement, insurance, auto, and housing in ADDITION to base pay. Now, my base salary may be roughly the same as his. But I pay FROM my base, my retirement, insurances, half my health care, auto and mortgage. All things considered, his net is better. He gets annual cost of living increases, continuing education, and student debt relief if needed. Not only do I not, but I’m reminded occasionally that my employment is an “at will” relationship. His job security is based on love and congregational care. I don’t begrudge him this. But let’s be honest here. What’s good enough for the goose is good enough for the gander. I realize that not all pastors are cared for the way our denomination cares for them, but many pastors are actually very, very well cared for by comparison. Congregations wouldn’t know that unless there is transparency in the financials. Please bear that in mind.

  • In my church, the pastor’s salary and package is available for all the church members to view and is included in the monthly budget. Occasionally, the salary and/or package for the pastor is brought up in member meetings and it has never caused any tension. In fact, I believe that the church members very much appreciate the openness of it and we continue to be generous towards the church offerings.

  • I think the better question is, where in the Bible do we see full time “pastors” get paid a salary? I am not saying don’t help pay for people to spread the gospel, but where in the Bible is that model present?

  • Jerry Cross says on

    Those who think they “have” to have this information should have their giving records printed and distributed for all to see as well.

  • I have been a church worker for forty years this year and until I came to my current congregation the salaries were always detailed for all to see…so it doesn’t matter to me. But, I feel like our church workers live in such a constant fish bowl, shouldn’t we afford them just one place where privacy is sacred? Make sure a Board oversees the salaries and that they are fair and reasonable, but other than that, keep them private. My suggestion? If you want to publish the salaries…then we should also publish the giving records of every member, every family. Full transparency works both ways…right?

  • It is my understanding that Minister’s “Packages” are required, by IRS to be specifically approved by the church, and approved prior to start of the new year. This is from our state convention CPA. We vote on the total budget which includes detailed packages for each minister. Not wanting to assume anything when IRS is involved, we vote separately on the packages. Note that we do NOT vote on Pastor’s package then Music Minister then Youth ….

  • It is my understanding that Minister’s “Packages” are required, by IRS to be specifically approved by the church, and approved prior to start of the new year. This is from our state convention CPA. We vote on the total budget which includes detailed packages for each minister. Not wanting to assume anything when IRS is involved, we vote separately on the packages. Note that we do NOT vote on Pastor’s package then Music Minister then Youth …. That assumes that a vote for the total budget is sufficient for the IRS since the each package is in the budget.

    • Tax-free housing allowance is required to be approved by the Vestry/board each year. But there is also a stipulation that can be in the resolution that states “the housing allowance of $$ is established on January 1, 2019 and will continue until modified by future housing resolution…” or words to that effect.

      Most other monetary aspects of the package (less insurance and mileage reimbursements for actual mileage driven) are taxable and the IRS will get their due in time.

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