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What Is a Fair Wage and How Does a Church Determine It's Worth?

Compensation for Church Personnel is usually divided into three categories: Salary, Benefits and Reimbursements. Churches are employers and should administrate a good and fair compensation in these three categories.

  • Salary: is the take home pay that the employee will pay taxes on. Ordained ministers will have housing options that are included in this category.
  • Benefits: are termed as business expenses of the employer, they are not part of the taxable salary paid the employee. Benefits provided by the church are good opportunities to reward and market employees above their salary option.
  • Reimbursements: are basically that – the church pays an employee back for out-of-pocket business/ministry expenses incurred while on church related business.
Churches need to see Compensation as a major portion of the church budget, and it must be appropriately planned, administrated and accounted for. There is stewardship required on the part of the employer and the employee.
Personnel Administration for a church requires a thoughtful salary plan that describes how it will conduct operations with regard to salary, benefits and reimbursements. A salary plan, establishes the policies and procedures that the congregation wishes to have administered to its employees.
According to Robert H. Welch, [Creating Efficiency for Effective Ministry, Church Administration, Broadman Holman Publishers, Nashville, 2005, Page 125] there are 8 steps in developing the Salary Plan.
  1. Determine the Mission and Purpose of the church.
  2. Create a leadership organization to meet that mission.
  3. Write job descriptions for all employee positions.
  4. Determine the relative worth of each job description.
  5. Determine the categories and limits of a scale of salaries to be paid.
  6. Establish policies and procedures relating to the administration of pay.
  7. Determine benefits that will be provided.
  8. Determine reimbursable business expenses offered.
Dr. Welch cautions that: “without first establishing what the church is to do and a determination of what personnel will be required to fulfill church mission, the numbers 4-8 of the Salary Plan will not be spiritually based”.

Basically, this writer finds two of the eight points grossly violated in the local church. One – churches omit their mission and purpose, and two – churches do not determine the relative worth of the job description to the mission and purpose.

Determining the relative worth of each job description is vitally important. These usually fall into four basic ministry areas: Pastoral, Educational, Musical and Support. Relative worth is placed upon a position as it applies to the overall mission and purpose of the church. The value and amount of personnel in a church is not to be based on church wealth, but church purpose. Money follows mission! Create the mission (of the church) and giving will come to support it and the personnel needed to carry out that mission.

Determine the worth of a position not by history of a position – again, focus on the worth of the position based on mission. When a mission or priority is added, add staff; if a mission or priority is changed or omitted, change or omit staff positions.

Church Personnel must have worth and purpose, and deserve a fair compensation. Churches need to fund positions that create missions – not just positions to be filled because the church has always had it.
Robert Grant

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