What Is an Appropriate Severance for Pastors on Their Way Out of a Church?

A power group surprisingly forced out Pastor Timothy after four years of successful ministry. Pastor John was caught embezzling funds and was fired immediately. After ten years, the board removed Pastor Ed because they believed he was not a leadership match for the congregation. 

Should these pastors receive a severance? It depends.

Severance pay is a common practice in many industries. Some employers will offer severance as a gesture of goodwill to those laid off, but it is not required by law under the Fair Labor Standards Act. Many severances are based on the length of employment. A reasonable expectation is one to two weeks of severance for each year of employment. The stipulations of a severance are often outlined in an employment contract. Unfortunately, most people do not have employment contracts.

What about paying a pastor severance? Whether to pay a pastor a severance depends upon the scenario, ministry tenure, and church budget. 

What is the scenario? 

Retirement. A long-tenured pastor beginning retirement may receive a severance for a few months following an official departure date. In this scenario, the church desires to honor the faithfulness of their shepherd by making the transition out of a pastoral role a little easier. These severances are generally good but should be kept under a year. 

Disqualification. When a pastor’s sins are to the degree of disqualification from ministry, the decision to pay a severance is a more difficult decision. Visceral reactions will land on both sides. Some will call for justice and want to cut off the pastor immediately. Others will desire to extend grace and help the family for a season. 

Each case is different. While it’s difficult to give a general rule for disqualified pastors, I believe the best path is to offer a one-month to three-month severance. Have a posture of grace and generosity. Potential exceptions would be cases of abuse and embezzlement, in which termination is immediate with no severance. 

Conflict. Some pastors are wrongly forced out due to circumstances entirely out of their control. Others create conflict and deserve to go. A severance is warranted in many cases of church conflict. For a shorter-tenured pastor, offer three months. For a longer-tenured pastor, offer six months. If a power group forces out the pastor, then give a year.

What is the pastor’s tenure?

Pastor Ed served his church without major incidents and minimal conflict. The church declined slightly over his ten-year tenure, and the board believed a leadership transition was in order. They asked Pastor Ed to step down. Most people liked him. At the same time, the church was not likely to split over his departure. In cases like this one, a general rule of thumb for severances is one month’s salary for every year served, up to a year. If a pastor served for nine years, then offer a nine-month severance. In Pastor Ed’s case, he should receive a severance for ten months. Severances beyond a year are not typically beneficial to the church or the pastors receiving them. 

Also, about half of pastors in the United States are bi-vocational. Unfortunately, these pastors rarely get anything in the form of a severance and are often neglected when transitioning between pastoral positions. 

What is the state of the church budget?

If compassion were currency, then many churches could afford to pay better severances. The reality is the budget will be a determining factor in the size of the payout. Some churches offer lump sums upfront. Frankly, I believe a better approach is to pay the severance on the normal pay cycle over a set period. The severance should include salary, benefits (health and retirement), and transition services like counseling. 

Lastly, it’s important to note that church employees are generally not eligible for unemployment benefits since most churches do not pay the unemployment tax in their respective states. As you determine a severance, consider these three questions. What is the scenario? What is the pastor’s tenure? And what is the state of the church budget?

Many thanks to Jared Matthew, who sent us this question. At Church Answers Central, we answer these kinds of questions every day. Church Answers Central is the world’s largest online community for practical ministry support. Get 24/7 answers to your church questions. Join a vibrant community of nearly 2,000 church leaders in a safe environment. Connect with top church health experts like Thom Rainer, Chuck Lawless, Sam Rainer, and others like you. Become a member today!

Posted on December 14, 2022

As President of Church Answers, Sam Rainer wears many hats. From podcast co-host to full-time Pastor at West Bradenton Baptist Church, Sam’s heart for ministry and revitalization are evident in all he does.
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  • Jeff Scalf says on

    Well this is interesting timing. I have just transitioned out of a 26 year lead pastorate. When I arrived 26 years ago they had less than $500 in all accounts. When I left this November they had over $200k in all accounts. I left because I felt it was time for a transition into a different aspect of ministry.

    The past few years have been a struggle like many churches are facing. Our community went through a Cat 5 hurricane in 2018, then COVID 2020 and then a staff pastor left and started a church 15 min from us in 2021. I was also the caregiver for my mom in my home for the past 5 years until she died fairly unexpectedly in June of this year.

    When I left I had 6 1/2 weeks of unused vacation time which was owed to me according to the manual that the Church Deacon Board adopted many years ago. So that’s about a 1 -1/2 months pay. They are paying me that.

    For 26 years of service they gave $150 for each year ($3900). I resigned and gave 6 weeks notice to help the church adapt to their 26 year pastor leaving. Also there’s a lot of strings to unwind and cut from 26 years. I also conveyed that I wasn’t going to another pastorate and I’m too young (57) to retire. I felt my calling was shifting to coaching and consulting pastor’s and churches. It would be a start up from ground zero. I would be selling my house and relocating to my mom’s house in another state.

    I guess I was a bit underwhelmed at $3900 for 26 years of faithful, dedicated and sacrificial service. Yes they allowed the congregates of give in a love offering above the $3900, which was just over $2,900. Am I wrong? I’m not trying to be ungrateful or have an embittered spirit about it. Just underwhelmed me that 26 years of faithful, sacrificial, and walking the church through tragic, hard times, bringing them from under $500 to over $200k in their accounts would have meant more in leaving appreciation.

    There indeed seems to be a lack of understanding on caring for the pastor in respect of all that he and his family provides for the congregation. I don’t know that congregations are stingy (giving grace across the board because I indeed know some are) they just don’t know what’s fair. Lord willing as I hope to coach pastor’s and churches I will teach the congregations to be caring and generous to the gift that Christ gave them through a pastor. Perhaps setting aside $100 to $200 a month in to an appreciation fund so that EACH YEAR they could draw some from that fund to appreciate the pastor and leave at least $1,000 each year to accumulate. This way if the pastor leaves under good terms that $1000 accumulated each year would be given as they leave. So if they are there 10 years and they have saved $1,000 each year there would be at least $10,000 in that appreciation fund. It wouldn’t cost the church any more to pass those saved funds along.

    Indeed I will be trusting God for my needs as I look to start up my coaching and consulting ministry. Blessings – Jeff

    • Sam Rainer says on

      Jeff – You’ve been through quite a lot! Wow. Your tenure and dedication to your church, community, and mom are commendable. You’ve done the right thing. Graciously accept what they have given you. But I believe you nailed it: “underwhelmed.” That’s exactly how I would feel.

    • I guess the first thought that comes to mind is “where’s the love”? All things considered, I would feel more than a little disrespected. And knowing myself I would let them know that I felt that way. That might make it easier for your successor when he eventually leaves.