How Do You Figure Out Fair Pastor Compensation?

Thomas Costello 1 Comment

How much you pay your pastor is a touchy subject. Some think pastors are paid too much, while others argue they’re not paid enough. So how do you figure out a fair pastor compensation rate that works for everyone involved?

Pastors are some of the most influential people in our society and have an undeniably challenging job. And many of them have families to support and want to fully focus on their ministry without worrying about finances.

So while pastor compensation will vary based on location and church, you should consider these guidelines to help you figure out a fair salary for your pastor.

How Do You Define “Fair” Pastor Compensation?

Despite the controversy you see highlighted in the news, the vast majority of pastors don’t have a huge salary (and certainly don’t fly in a private jet).

On the other hand, nobody wants their pastor at the poverty line and worrying about making ends meet.

So how do you define “fair” pastor compensation?

This discussion applies to pay rates for your senior pastor, children’s pastor, executive pastor, worship pastor, and others.

Here are some general principles to consider when setting pastor compensation, along with some questions to ask yourself:

  • Pastors should be paid a livable wage: However, what is the difference between being above the poverty line and the standard of living you’d like your pastor to be able to maintain?
  • Pastors shouldn’t have to worry about providing for their families: Will their compensation cover food, shelter, healthcare, and education? What about unexpected emergencies or things like kids’ activities and vacations?
  • Pastors should be able to save for retirement: What kind of retirement plan does the pastor have? How much will they need to save for a comfortable retirement?

Most pastors today haven’t taken a “vow of poverty” or committed their families to a life of financial struggle. Some have opted for bi-vocational ministry because they can’t comfortably survive on a pastor’s salary alone.

So, in general principle, your church board needs to decide:

  • Are you only covering basic necessities and asking your pastor to make it on a livable wage or supplement from other income sources?
  • Are you providing for an average middle-class lifestyle?
  • Do you want to pay your pastor at a higher level?

What Factors Weigh Into Determining Pastor Compensation?

Before you lock in on a specific amount for pastor compensation, here are some specific factors to consider.

1. Cost of living specific to your location

Depending on where you live, looking at the average national salary for pastors may not be helpful. The Bureau of Labor Statistics states the mean annual salary for a pastor in the US is $55,680 but ranges from $30,450-80,920.

But what if you live in California or New York?

Where you live, and whether you’re in an urban or rural area, will affect the cost of living. And that may mean you need to pay your pastor more.

To get an idea of the living wage in your area, you can use tools like the MIT Living Wage Calculator or NerdWallet Cost of Living Calculator.

2. Job responsibilities specific to your church

Are you a megachurch or a smaller church? Does your pastor lead a large staff, or are they solo?

The size and scope of the church will play a role in how much you pay your pastor. For example, a pastor with more responsibilities will likely require a higher salary than one with fewer duties.

3. Education and experience specific to your candidate

You will typically pay a pastor with a seminary degree and more years of experience a higher wage than someone just starting.

And while you may be able to get away with lower pastor compensation for a less experienced candidate, keep in mind that they’ll be more likely to move on to another church as soon as possible. And turnover can be detrimental to your church culture.

4. Culture and norms specific to your denomination

Some denominations have an explicit system for pastor compensation, while others leave it up to the church to decide.

If you are part of a denominational church, you must consider those guidelines and restrictions. Also, you should compare your pastor’s compensation to other churches in your denomination in comparable locations.

5. Benefits and perks offered in the pastor compensation package

In addition to salary, you may provide other benefits and perks as part of pastor compensation. These can include standards like health insurance, paid vacation, and a retirement plan.

In addition, pastors have unique tax benefits like the Pastor’s Housing Allowance (check out this ultimate guide to the housing allowance for more details).

You may also want to consider offering other perks like a car allowance, professional development opportunities, paid sabbaticals, or help with childcare.

6. Rate of Inflation

At the time of this posting, inflation is over 8%, a record high we haven’t seen in decades.

This means that your pastor’s salary is going down in purchasing power. So be sure to stay in touch with what’s happening with inflation and the economy and adjust pastor compensation accordingly.

Why You Need to Pay Your Pastor More

You want your pastor to be in the ministry for the right reasons. That’s not to get rich. But rest assured that the percentage of wealthy pastors is tiny.

The vast majority of pastors are in it for the love of God and the call to serve His people. And they should be fairly compensated for their work.

It’s biblical, reduces turnover, and keeps your pastor from having to take a second job just to make ends meet.

According to 1 Timothy 5:18: “Scripture says, ‘Do not muzzle an ox while it is treading out the grain,’ and ‘The worker deserves his wages’.” We see other scriptures that echo this same sentiment.

So, what do you think? We’d love for you to weigh in on how to determine a fair pastor compensation in the comments below.

More on church salaries

How Do You Figure Out Fair Pastor Compensation?

About The Author

Comments 1

Leave a Reply

Your email address will not be published. Required fields are marked *