When your church calls a new pastor, you have an opportunity to start off on the right foot as you set up the pastor’s compensation.

Consider the following factors when determining how much to pay your pastor:

  • The church’s financial resources
  • Housing provided by the church
  • The pastor’s responsibilities
  • Your new pastor’s experience and education
  • The salaries of other professionals in your community with similar experience and education
  • The cost of living in your area
  • Salaries at other churches of similar size

A common mistake that distorts the actual amount of pay your pastor will have for living expenses is to offer your new pastor a “package” meant to cover take-home pay, retirement and medical benefits and ministry-related expenses. A church might say, for example, that it will budget a set dollar amount for the pastor, letting the pastor decide how to allocate funds for benefits and ministry-related expenses. This forces the pastor to choose between waiving essential benefits and doing without justifiable expenses or accepting lower take-home pay.

Offering a “package” may also lead to a miscommunication if the pastor does not understand how benefits and expenses will be taken from his or her paycheck. This practice leaves the church without a clear understanding of how much they are providing to meet the pastor’s basic needs and may disadvantage the church if the pastor dies or becomes disabled and benefit protections are not in place. MMBB strongly recommends that churches budget separately for compensation, benefits and ministry-related expenses. The church—not the pastor—is responsible for benefits and ministry-related expenses.

From the 2012 MMBB Guide for Church-Related Employers. For the full guide, please visit our Download Documents & Resources section.