2007 Salary Survey - Compensation ExampleHere's an example of how the finance committee of a church might go about planning for the compensation of its pastor in a way that provides a fair comparison to similar jobs in the community. Let's assume Pastor Mason is 42 years old and serving a congregation that has average worship attendance of 125. The congregation is in a suburban location. Base CompensationBased on the results of the salary survey, the median salary plus housing for ministers serving in churches with 101-250 in worship is $46,250. In a suburban context, the median is $43,500, and for full-time ministers, the median is $43,800. Recognizing that these figures represent the "middle of the road" and wanting to be more than a "middle of the road" church, the committee settles on a figure slightly above the median, $48,000 for salary and housing. Benefits in Addition to Base: Pension and Health CarePastor Mason is a member of the Pension Fund, so the committee agrees to pay the pastor's Pension Fund dues of 14% in addition to salary and housing. The Pension Fund dues are calculated on base compensation, the combined total of salary and housing. On base compensation of $48,000, Pension Fund dues are $6,720. Assuming Pastor Mason is enrolled in Church Wide Health Care, the annual premium based on his age for family coverage with a $500 deductible is $13,537. Premium tables are available at the Church Wide Health Care site. The committee may negotiate other benefits that could be deducted from base, such as tax-deferred annuities.
Social Security OffsetThe advantage of including a Social Security offset is that it allows for a more direct comparison between the minister's compensation and that of similar positions in the community. The matching portion of FICA is not part of what most employees and employers view as salary. So when comparing the minister's base compensation to similar positions, the church should either add the Social Security offset (7.65% of salary and housing) as a separate line item or decrease the base compensation used for comparison by 7.65%. If Pastor Mason's church chose to offer a Social Security offset, it would be computed as 7.65% of $48,000, which is $3,672. [Read an explanation of the Social Security offset]
Professional ExpensesThe committee will most likely want to include reimbursement for automobile expenses. The 2007 IRS guideline is 48.5 cents per mile. If the minister drives 10,000 miles per year on church-related business, the reimbursement for the year would be $4,850. The committee may also choose to include allowances for books, continuing education, meetings and retreats. These expenses are most often not considered part of the pastor's compensation.
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