Crafting a Compensation Package: 4 Tips for Church Decision Makers
Creating a compensation package for a new hire can be tricky. You have to take several factors into account including the geographic location of the church, housing allowance for ordained ministers, and dual tax status. Matt Moore has served as the Church Administrator at Briarwood since 2001 and his 18 years of experience have taught him a lot about crafting and reviewing church compensation packages. Here are 4 tips from Matt on constructing compensation packages for church staff and pastors.
Look to the scriptures
Ministerial compensation is a local session’s decision and every session’s payment philosophy should be guided by the scriptures. 1 Timothy 5:17-18, along with other verses, makes it clear that pastors and church staff should be fairly compensated for their work. Because pay should be equitable according to a pastor’s role, it will vary from church to church and city to city.
How do you ensure that your pastors are being properly compensated? The Book of Church Order provides wonderful guidance on the issue of pastoral compensation. Chapter 20-6 instructs that a pastor should be compensated to such a degree that “they are free from worldly cares.” Ministry is heavy and the compensation package should allow those who care for Christ’s flock to be free from financial stress.
Review compensation every year
Church staff and officers benefit greatly from a structured performance management and planning process. At least once a year, take the opportunity to sit down and talk with each staff member about their job performance. Give a pat on the back where it’s deserved and also look for opportunities to improve.
You will also need to monitor changes in the rate of inflation and the cost of living in your local area. This review process allows the ministry to stay current with the applicable market in the areas of salaries and benefits. The purpose of this process is to ensure that every church staffer is receiving fair compensation while connecting your church’s view of compensation together with performance.
Use your resources
The internet has made comparing and crafting call packages easier than ever. There are a number of resources church administrators can use to ensure their pastors are being fairly compensated according to national standards. Confidential salary surveys are useful tools for providing comparative salary data by position, geographical location, and size.
In addition to these surveys, the Society for Human Resource Management (SHRM) and the Bureau of Labor and Statistics provide salary increase projections and economic data to help ensure your pastor’s compensation remains up to date. While these tools can be helpful in deciding a yearly payment amount, a compensation package must be taken as a whole and not merely as a salary. Every compensation package should, at the minimum, include the benefits of health insurance, life insurance, disability insurance, and a good retirement plan.
Focus on what matters
When promoting or increasing pastoral staff compensation, it is inappropriate to consider anything not job-related. This includes age, race, gender, disability, and even marital status. You need to focus on the skills and experience your church needs. Generally, look at current performance instead of past performance when making annual compensation decisions. Approach every important decision prayerfully, looking to the scriptures for guidance.
It’s easy to get caught up in the numbers, but it is vital that our pastors and their families be cared for after their retirement. I’m grateful for the PCA’s renewed emphasis on retirement readiness for ministry staff.
Programs like the PCA Ministerial Relief Offering are essential in ensuring the basic needs of our retired ministers are met following their retirement. It is also the job of ruling elders to come alongside their pastors and ensure they are living within their means, preparing for retirement, and not spending time stressing and worrying about their finances.
The PCA Call Package Guidelines offer guidance for church administrators and also provides best practice guidance regarding the content and structure of ministerial call packages for ordained clergy. It includes discussions on a number of topics like opting out of Social Security, a minister’s dual tax status, and challenges in preparing ministers’ tax returns. I’d encourage everyone involved in structuring a compensation package to consult it.
Matt Moore has served as the Church Administrator at Briarwood since 2001. He leads the Administrative Services Team to facilitate ministry at Briarwood in the areas of Accounting, Facilities, IT, Communications, Food Services, and the Book Store. Matt and his wife Tammy have been married since 1986 and have two daughters.
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