Determining the Minister’s Compensation
This document lifts up three methods for determining equitable compensation for the minister:
- Based on housing values in the community where church members and leaders live;
- Based on comparison to the local school district;
- Based on the operating budget of the church.
Establishing and negotiating the minister’s compensation and benefits is a highly contextual activity. It is unique and specific to each congregation. The data contained in this report may guide that process, but it is intended more to be a comparative guide. That is to say, it is not intended to answer the question, “What should we pay our minister?” A salary survey of ministers in a region, however, can help congregations understand ministerial compensation in comparison to congregations of similar size and in a similar context.
So what is fair compensation for the minister? The easiest answer to give, although possibly not the quickest to compute, is that the congregation should support its minister in a lifestyle comparable to the leadership of the church and appropriate to the community in which the church is located. A little research can help the congregation establish a baseline.
Community
Look at the church’s community. Data from the U.S. Census Bureau can provide the median household income in a community. Remember that “median” means “middle.” The median is the point at which half the households have a higher income and half have lower. The Census Bureau also reports the distribution of household incomes for a community. Using tools available through the Census Bureau, a congregation can retrieve this information for a variety of community settings.
School System Data
Another piece of information is the salary table for the local school system. In most communities, this is public information, available on state and local district web sites. For a solo pastor in a congregation, a typical comparison for a minister with an M.Div. is the local salary for a teacher with a master’s degree or master’s degree plus 15 hours. For a minister with a terminal degree, D.Min. or Ph.D., for example, use the salary schedule for teachers with a doctoral degree. Teacher salaries are adjusted based on years of experience, and the years of ministry experience should be considered in the comparison as well.
A multi-staff congregation might compare the base compensation for an associate minister with the salary for a teacher with a master’s degree but less experience. If the associate position does not require an M.Div., use the salary schedule for teachers with a bachelor’s degree.
In reviewing the salary for the senior minister in a multi-staff congregation, consider the salary or adjustment the school system makes for administrative positions such as principal. As with other comparisons, the minister’s educational credentials and years of ministry experience should be considered in comparing these salaries.
Church Leadership
Take a look at the church leadership. Although one might ask what the average income is among the leaders of the church, there are ways to approach compensation for the minister that aren’t quite so intrusive and personal. Where do the church’s leaders live? What are the typical house values in those neighborhoods? What kind of salary would be required for the minister to live in those neighborhoods? Answering these questions will help the church arrive at equitable compensation for its minister.
Benefits
This research, however, only determines the level of base compensation for the minister. Benefits such as health care coverage and Pension Fund dues or other retirement plan should be paid on behalf of the minister in addition to, not as a part of, base compensation. For example, when looking at the salaries in the local school district, remember that the number on the salary schedule does not reflect the total cost of employing a teacher. The school system provides healthcare and pension benefits in addition to salary. The school system is also matching the teacher’s withholding for FICA and Medicare.
Expectations
The church must also consider what is expected of the minister. If it is expected that the minister will be bi-vocational and earn a portion of their living from work outside the church, then the church is only responsible for a portion of the minister’s compensation. If, on the other hand, the church expects the minister to be full time, devoting all their working time to ministry and leadership in the congregation, the church has full responsibility for the minister’s equitable compensation.
Affordability
The other factor to consider is the amount that the church can afford based on its size and operating budget. This question can determine whether it is fair for the church to expect full time service from its minister. It is typical for a church to expend 60-65% of its operating budget for all staff, including the ministers and other church employees. Consider a church with an operating budget of $150,000 that employs a minister and a part-time administrative assistant.
60% of the operating budget is $90,000. If the church pays the administrative assistant $30,000 per year, that leaves $60,000 for the minister’s compensation and benefits. If the minister’s 14% Pension Fund dues are included, that leaves $52,631 for base compensation and does not consider health care premiums. If the church is providing health care coverage in this example, base compensation is reduced even further. Compare the resulting base compensation with teacher salaries. How does this compare with median income in the community? Based on these comparisons, the church can determine if it is fair to expect full-time commitment from the minister. The answer will vary from community to community and church to church.
Ministerial compensation, as stated earlier, is highly contextual based the community and the congregation. To get assistance with questions about clergy compensation, contact your regional office. The Pension Fund of the Christian Church can also help with questions about clergy compensation and benefits.
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