Pastor's Compensation - Objective Standards?

At most companies, HR uses objective standards / qualifications / criteria to determine the salary ranges for employees. For example, one's compensation is often correlated to one's experience, level of education, job function, industry averages, cost of living, etc.

When it comes to a pastor's compensation, how is that determined? A better question is how should a pastor's compensation be determined?

Should the compensation of two equally qualified / educated / experienced men be different based on the size of their family?

Should the compensation of a man with an advanced theological degree right out of seminary be compensated more than a man who only holds a Bible degree but who has years of ministry experience?

Should the man's compensation be based on his wife also working at the church in some capacity?

Bottom line, what objective factors should go into determining a pastor's compensation?

10540 reads
RickyHorton's picture

Quickly, I would encourage anyone looking at this topic to start with a thorough study of what Scripture has to say about this. The main passages are I Cor. 9 and I Tim. 5, but I would also suggest looking at how Israel was instructed to care for the priests. This should be the starting point of a review of pastoral compensation.

Ricky

Jim's picture

First my views on some of the questions (without elaboration)

  • Question: Should the compensation of two equally qualified / educated / experienced men be different based on the size of their family? Answer: In my view no.
  • Question: Should the compensation of a man with an advanced theological degree right out of seminary be compensated more than a man who only holds a Bible degree but who has years of ministry experience? Answer: The man's experience trumps the inexperienced but educated newbie.
  • Question: Should the man's compensation be based on his wife also working at the church in some capacity? Answer: The wife's work, whether at the church or outside of the church should be immaterial to the process

The multiple parallel approaches

  1. Network with other churches of same size and doctrine in your area. What is their salary structure for their Pastor(s). (Relevance: location and Ecclesiastical community). Eg: Location: A Baptist Pastor in Bovey MN is not likely to need, require, or demand the same salary as a Baptist Pastor in Cherry Hill, NJ.; Eg: Size: A church of 33-50 (and there are thousands of churches that size are not able to and shouldn't be expected to pay the same salary level as a church of 500.
  2. Research church salary guides.
  3. Consider the mean salary of the non-vocational leadership team. If the church has 3 deacons and their average salary is $ 50K ... that is a helpful tool to build upon
  4. Consider the previous year's budget. Build upon that. Tip to men going to a church: Ask to view the financial statements. If they only paid the previous Pastor some paltry amount, you are not likely to change that. (Caveat emptor)
  5. Consider the man's needs. A newly wed couple with no children needs less than a man with 5 teenagers.
  6. Consider the whole package: health care, housing, taxes, expenses, funds set aside for retirement, conferences, book allowance, etc.
  7. Consider the scope of the man's responsibilities. A complex ministry structure (say with a school, other ministries) should translate into a higher salary.
  8. Don't be cheap!
  9. Be Biblical! 1 Timothy 5:17-18
dcbii's picture

EditorModerator

Jim Peet wrote:

  • Question: Should the compensation of two equally qualified / educated / experienced men be different based on the size of their family? Answer: In my view no.

The multiple parallel approaches

  • Consider the man's needs. A newly wed couple with no children needs less than a man with 5 teenagers.


Jim,

These two points from your last post seem to contradict, although your point could be taken as referring to experience, given that a newlywed will (probably) have less experience than a man that has 5 teenagers, unless of course the latter got the call to preach late in life.

Dave Barnhart

Jim's picture

dcbii wrote:
These two points from your last post seem to contradict, although your point could be taken as referring to experience, given that a newlywed will (probably) have less experience than a man that has 5 teenagers, unless of course the latter got the call to preach late in life.

I suppose they do "seem to contradict".

With regard to the first point: "Should the compensation of two equally qualified / educated / experienced men be different based on the size of their family?" I'm thinking of a multiple Pastor staff. I don't think that the larger family of one should demand (I use "demand" in an economic sense) a higher salary
.
With regard to the second point: I suggested the multiple parallel approach to build a compensation package. I qualified it with the word "consider". It's a fact that one's financial needs vary with life's circumstances and seasons. Example. We are empty nesters. When each child left the house our expenses dropped at each step (think auto insurance, clothing expenses, telephone expenses, water and heating bills (no more l o n g showers!), educational expenses)

I do believe that in one local church, that the salaries of "two equally qualified / educated / experienced men" should be essentially identical if they have the same responsibilities.

Updated: A team leadership approach by the governing board (the official organization that has the fiduciary responsibility for the congregation) should result in a wise & reasoned recommendation to the congregation.

Matthew Olmstead's picture

You will notice how few pastors will participate in this discussion. Biggrin

Father of three, husband of one, servant of the Lord Jesus Christ. I blog at mattolmstead.com.

T Howard's picture

Based on these figures, the pastor is woefully under paid based on his experience.

Why is this acceptable to most congregations?

Jim's picture

T Howard wrote:
Based on these figures, the pastor is woefully under paid based on his experience.

Why is this acceptable to most congregations?

  • Some Pastors need to more proactively dialogue with their boards to have a strategy to be paid appropriately. I'm not sure why lay (I hate that term) leadership would not want to see the Pastor appropriately paid in accordance with the teaching of Scripture.
  • In some cases the will may be there but not the means. I know of a rural church where the entire church budget is only $ 20,000 per year. Even doubling that church's income, hardly leaves room for adequate pay
  • Some church situations are ideal for tentmakers or for retired Pastors who have social security to help meet their total compensation needs
  • In some churches, the Pastor's salary is unpublished. Not discussing the pros or cons of this, but it is difficult to take personal responsibility for a Pastor's salary if it is only known to the board.
T Howard's picture

Jim,

I understand the small rural church situation. Someone who signs up for that would need to be willing to be bi-vocational.

On the other hand, I've been around "compensation committee" members who thought they were helping the pastor be a better pastor (i.e. more spiritual) by limiting his income. Why, in general, is it expected that a pastor who has an advanced theological degree and ministry experience get paid less than a businessman with an MBA or an attorney with a JD?

Certainly I agree that a pastor's motivation shouldn't be money, but I just wonder how many lay people would be willing to put themselves (and their families) in the same situation and under the same scrutiny? They want to live in a nice community, own a nice house, have 2+ new cars, go on nice vacations, put braces on their kids' teeth, and save for their kids' college education -- but they expect their seminary educated pastor to provide for his wife and four teenage kids on $60K? And, if he does ask for a raise, some members of the church (or compensation committee) think he's out to get rich...

Jim's picture

T Howard wrote:
.... if he does ask for a raise, some members of the church (or compensation committee) think he's out to get rich...

A strategy is to have a trusted board leader (trustee?) be the Pastor's advocate.

Jay's picture

Jim Peet wrote:

]]>Median Salary by Years Experience - Job: Senior Pastor (United States)]]>]]>Median Salary by Years Experience]]>

I'm a little confused by this report - most first year pastors are making more than those who have been in ministry for 2 to 9 years? Is that because of schooling? Or is it that most first year guys are taking ministries with an already established family? I'll second the nod for bi-vocational pastors. It is a tremendous burden on churches to pay a salary and benefits, esp. here in New York. We need men who are committed enough to the work that a bi-vocational ministry isn't just something that rarely happens. I bet it's more the norm than the exception, yet I don't recall anyone in undergrad or grad school teaching about it.

"Our task today is to tell people — who no longer know what sin is...no longer see themselves as sinners, and no longer have room for these categories — that Christ died for sins of which they do not think they’re guilty." - David Wells

Mike Mann's picture

Matthew Olmstead wrote:
You will notice how few pastors will participate in this discussion. Biggrin

Some of us hate to admit how little we make and we don't want to be perceived as money hungry.
Also, I pastor a small country church comprised of more retired people than working.
I am content to be bi-vo as long as the Lord keeps me here, but at 58 with numerous health problems it's beginning to be difficult.

T Howard's picture

Jay C wrote:
I'm a little confused by this report - most first year pastors are making more than those who have been in ministry for 2 to 9 years? Is that because of schooling? Or is it that most first year guys are taking ministries with an already established family?

Jay, that is probably due to the inadequate sample size (n=14). It's not large enough to be statistically valid.

T Howard's picture

I'm still trying to understand what objective criteria should be used to decide pastoral compensation.

Should education be an objective criteria? If a man has earned an M.Div or Th.M or D.Min, should he be compensated more than an equally qualified man with a B.A. in Bible or M.Min?

According to the table above, experience seems to be correlated.

What other objected factors are out there?

BryanBice's picture

T Howard wrote:
I'm still trying to understand what objective criteria should be used to decide pastoral compensation.

Should education be an objective criteria? If a man has earned an M.Div or Th.M or D.Min, should he be compensated more than an equally qualified man with a B.A. in Bible or M.Min?

According to the table above, experience seems to be correlated.

What other objected factors are out there?

In an ideal church world, a church could establish a salary range for the pastor. That range should compare favorably to other professional positions in his community, such as the public high school administrator, and should be adequate for a family of 5 to live comfortably in a decent home/neighborhood in the community. Objective factors that determine the specific salary would be: 1) years in pastoral ministry, and 2) educational accomplishments. Factors that should not be considered are his age, marital status, and size of his family. The monetary value should be tied to the position, not the pastor's personal life. That's in the IDEAL church world, which rarely exists, in my (albeit limited) experience.

In the real church world, especially in churches <100 (which is the majority!), churches budget about all they think they can for pastoral salary & benefits. If Pastor A who has a BA & 10 years ministry experience leaves and Pastor B who has an MDiv & 18 years experience is called to replace him, it's not likely the new guy is going to have a larger salary than the one who left--the church believes it's doing about all it can. Similarly, turn it around. If it's Pastor B who leaves & Pastor A takes his place, the church won't likely give the new pastor a smaller salary on account of his educational degree or experience because the church realizes it's not doing enough as it is. By the way, I'm not talking here about churches that have the "let's get 'im for as little as we can" attitude (which is true of churches large and small!!).

In analyzing the table, I wonder if there's any connection between the ages of the pastors and the size of their church. IOW, the older a pastor gets, there's a greater likelihood that he'll move into a larger church or his church will grow, and the compensation will as well.

Bottom line. If I were in a church that had the luxury of paying a pastor a good salary, I would establish an objective system of determining an individual salary within a range, based on pastoral ministry experience and educational accomplishment.

Incidentally, I heard a guy recommend the pastor's salary should be tied to the church's growth under his ministry. If the church grows 10% in a year, he should get a 10% raise. How's that for encouraging a guy to have the wrong motives for seeing his church grow!?! And what if it drops 10%? Ouch!

Finally, the article in the Baptist Bulletin recommended in another post is very good for sharing with deacons/elders/finance committee.

RickyHorton's picture

T Howard wrote:
At most companies, HR uses objective standards / qualifications / criteria to determine the salary ranges for employees. For example, one's compensation is often correlated to one's experience, level of education, job function, industry averages, cost of living, etc.

I think we need to remember that the church is not a business, nor should it be run like one. We can use some methods from business to determine such things as a compensation package, but these methods need to be viewed through the lense of Scripture.

T Howard wrote:
When it comes to a pastor's compensation, how is that determined? A better question is how should a pastor's compensation be determined?

As I stated in my first post, there should be a thorough study of Scripture on this before attempting to come up with dollars. Why? Because even though Scripture does not give a set of instructions for setting compensation, it does give principles and proper attitudes towards compensating the pastor. For example, what needs of the priests was Israel supposed to supply? In I Cor. 9 and I Tim. 5, what needs of Paul and his companions were to be met if he did not refuse the provision? What is the general attitude towards the level of compensation...as little as possible or well compensated? And which side would you rather err on...paying too little so that the pastor is handcuffed, or paying more than sufficient and letting the pastor give back anything he thinks is too much??!!!

That being said, factors such as the pastor's living expenses, retirement, insurance, etc. should be used in setting a salary. Salary surveys can be used, but they can be misleading. For example, if the survey shows that pastor's are woefully underpaid, should we do the same? Also, what is the survey including in the figures? Do they include salary, housing allowance, insurance, retirement, etc.? Research needs to be done to make sure you compare apples with apples. Factors such as the size of the congregation, is there a school, size of the staff, etc. should also play into the salary. And I do believe the education level and years of experience should contribute. However, going back to Scripture, at a minimum, the needs of the pastor should be sufficiently (and more so in my opinion) met.

T Howard wrote:
Should the compensation of two equally qualified / educated / experienced men be different based on the size of their family?

I do think you can make a case for this from Scripture. In I Cor. 9, Paul asks if he or his companions have the right to take along a believing wife. This is a rhetorical question he is asking. Why does he ask this? This is in the context of him defending his right to live by those who benefit from his labor. I believe he is also defending the right to the provision for his families needs. If you go to I Tim. 5, it speaks of muzzling the ox. It should not be muzzled because it needed to reach down and gain provision for its needs. What are the needs of the pastor? He has a responsibility to provide for his family. Do some have greater needs (bigger family)? I don't think I can stand up and dogmatically say that I Tim. 5 demands this, but I think I Cor. 9 builds a much better case on this.

T Howard wrote:
Should the compensation of a man with an advanced theological degree right out of seminary be compensated more than a man who only holds a Bible degree but who has years of ministry experience?

Of course, Scripture does not address this, so I think the answer here depends. The one that has a higher degree and is right out of seminary possibly has expenses associated with obtaining that degree. Should the church compensate more for these expenses and for the increased knowledge and experienced gained in seminary? I believe it is a consideration and should probably require more compensation. However, the man with no seminary degree but has years of experience can be just as effective (for lack of a better term) due to his experience. You can make a case to paying him the same as the other. I personally think it depends on the person more so than the degree or the experience.

T Howard wrote:
Should the man's compensation be based on his wife also working at the church in some capacity?

If she works, she is worthy of her hire.

T Howard wrote:
Bottom line, what objective factors should go into determining a pastor's compensation?

Bottom line, I believe Scripture teaches to be generous in our provision for the pastor. Many believe double honor (I Tim. 5:17) to be double pay due to the context of the passage. Double what? We do not know so you can't be dogmatic there, but I would rather err on the side of paying too much than standing in front of God trying to explain why we kept him in the poor house and made him struggle! All this is predicated though on the assumption that the church can pay.

I'll end with a conversation I once had with a pastor. He said that money was always tight and always a concern. Certainly he put his faith in God that He would provide and He always did. But the lack of money was always a concern. Someone in his church gave him $500 as a gift. He made the comment to me that it was such a relief to be able to do his work as a pastor for several weeks without the worry about how he would pay the next bill. It freed his mind to focus on what God had given him to do. If we have the means, why would we not do this?

Ricky

RickyHorton's picture

Jay C wrote:

I'll second the nod for bi-vocational pastors. It is a tremendous burden on churches to pay a salary and benefits, esp. here in New York. We need men who are committed enough to the work that a bi-vocational ministry isn't just something that rarely happens. I bet it's more the norm than the exception, yet I don't recall anyone in undergrad or grad school teaching about it.

It may be a burden, but it is biblical. Are you saying that pastors by default should be bi-vocational, or are you simply saying that more pastors need to be willing to serve in such a manner? I believe Scripture teaches that a church should support its pastor if it is able. The pastor may decide not to accept it (as in the case of Paul), but the church should offer if it is able.

Ricky

Mike Mann's picture

RickyHorton ][quote=Jay C wrote:

It may be a burden, but it is biblical. Are you saying that pastors by default should be bi-vocational, or are you simply saying that more pastors need to be willing to serve in such a manner? I believe Scripture teaches that a church should support its pastor if it is able. The pastor may decide not to accept it (as in the case of Paul), but the church should offer if it is able.

Ricky


Of course, if it's able. That's the whole point of Bi-vo pastors. My church pays me well for its budget but some weeks my salary is more than the offering. I can't live on what they pay and so I also work. I have no problem with that at all.

Jim's picture

RickyHorton wrote:
Are you saying that pastors by default should be bi-vocational, or are you simply saying that more pastors need to be willing to serve in such a manner? I believe Scripture teaches that a church should support its pastor if it is able. The pastor may decide not to accept it (as in the case of Paul), but the church should offer if it is able.

I know you posed this question to Jay C but if this is OK I would like to provide my own views:

  • The church should provide as it is able. There is no doubt about that in my mind: 1 Timothy 5:17-18
  • Some churches are not able. Possible reasons:
    • Rural church in region with declining population
    • A declining church (many reasons for this .... not elaborated here)
    • Poor financial choices in previous years (perhaps a previous "administration"). Eg High debt load
    • Regions with high unemployment (places like Maine, areas of Michigan, and Northern Indiana come to mind). http://www.nytimes.com/interactive/2009/03/03/us/20090303_LEONHARDT.html NYTimes unemployment map
    • Locations in a poor areas (urban ministries)
  • The choices for the church not able:
    • Fold because it cannot adequately provide for a Pastor (Comment: this is not the best choice in my view!) OR
    • Provide as it is able and have an under-supported Pastor (it strikes me that this is completely unscriptural in light of (1 Timothy 5:8 ) OR
    • Provide as it is able and trust the the Pastor will accept the burden of being bi-vocational.
  • The choice for the under-supported Pastor:
    • Grin and bear it .... petition, preach and teach (on giving, stewardship, support of the Pastor, etc) OR
    • Move on to greener pastures. If the Pastor deems the church able but unwilling this may be the best recourse. (Moving solves the issue for the Pastor ... but not for the church!) OR
    • Work "[with ones' own ] hands ... provide for [one's ] necessities" (Acts 20:33-34). Knowing that to not is "is [to be ] worse than an infidel" (1 Timothy 5:8 )
  • Some men are uniquely qualified and called to serve bi-vocationally.
  • In light of the high numbers of small churches, it would seem that it would be wise for more men to consider the bi-vocational route
Jay's picture

RickyHorton wrote:
It may be a burden, but it is biblical. Are you saying that pastors by default should be bi-vocational, or are you simply saying that more pastors need to be willing to serve in such a manner? I believe Scripture teaches that a church should support its pastor if it is able. The pastor may decide not to accept it (as in the case of Paul), but the church should offer if it is able.

The latter - and Jim and Mike have done well in providing the reasons why.

I will PM you some additional thoughts later, but here in NY - especially the further away you get from NYC - there are a LOT of good churches that simply can't afford to pay a standard 'livable' wage. I know of two within an hour's drive [from where I'm at ] who could not do so, and their priorities are paying the small staff that they have a livable wage. I wish that both BJU and NBBC [I can't call in NIU yet Wink ] had stressed that in their classes, and had done a LOT more to emphasize the reality of churches that cannot pay a 'good' salary and the critical need for bi-vocational ministers. I think we may have talked about it in one class in six years' worth of schooling, and it was usually presented in a "this may happen to you, so be prepared" way.

I think I heard a statistic somewhere that 80% of all churches are less than 100 people. That's a MASSIVE amount of churches that [in all likelihood ] can't support a full time pastor.

"Our task today is to tell people — who no longer know what sin is...no longer see themselves as sinners, and no longer have room for these categories — that Christ died for sins of which they do not think they’re guilty." - David Wells

Bob T.'s picture

Did the above get your attention?

To be safe a church should get hold of the local high school teachers compensation scale. Take the amount a high school teacher with the same years of experience would get. Then double it so as to meet double honor standard. Then to that add medical insurance premium and life insurance premium. Then to that add a monthly car and expense allowance for maintenance and gas. This should be a reasonable final compensation. Then all the Pastor's housing expenses should be totaled and averaged and this amount singled out from the foregoing and paid separately for housing allowance. The insurance premiums should then be paid directly if possible.

If the church cannot afford the above amount then they should compensate what they can and give the pastor a monthly receipt for services rendered but not compensated for. If they have a missions budget they should also list this as the Pastors giving to missions as it is the pastor (the churches primary missionary) who is being shorted so the church can feel good about their missions giving. I saw a church with a 100 thousand dollar annual missions budget tell a Pastor they could not give him a raise until giving was better. His compensation was already less than normal and less than needed. But they took great pride in being missions minded!

RickyHorton's picture

Jay C wrote:

The latter - and Jim and Mike have done well in providing the reasons why.

I will PM you some additional thoughts later, but here in NY - especially the further away you get from NYC - there are a LOT of good churches that simply can't afford to pay a standard 'livable' wage. I know of two within an hour's drive [from where I'm at ] who could not do so, and their priorities are paying the small staff that they have a livable wage. I wish that both BJU and NBBC [I can't call in NIU yet Wink ] had stressed that in their classes, and had done a LOT more to emphasize the reality of churches that cannot pay a 'good' salary and the critical need for bi-vocational ministers. I think we may have talked about it in one class in six years' worth of schooling, and it was usually presented in a "this may happen to you, so be prepared" way.

I think I heard a statistic somewhere that 80% of all churches are less than 100 people. That's a MASSIVE amount of churches that [in all likelihood ] can't support a full time pastor.

I agree with all of you. The issue comes when a church can support a pastor and does not. But you are right that there is a need for bi-vocational pastors.

Ricky

Alex Guggenheim's picture

Bob T. wrote:
Did the above get your attention?

To be safe a church should get hold of the local high school teachers compensation scale. Take the amount a high school teacher with the same years of experience would get. Then double it so as to meet double honor standard. Then to that add medical insurance premium and life insurance premium. Then to that add a monthly car and expense allowance for maintenance and gas. This should be a reasonable final compensation. Then all the Pastor's housing expenses should be totaled and averaged and this amount singled out from the foregoing and paid separately for housing allowance. The insurance premiums should then be paid directly if possible.

If the church cannot afford the above amount then they should compensate what they can and give the pastor a monthly receipt for services rendered but not compensated for. If they have a missions budget they should also list this as the Pastors giving to missions as it is the pastor (the churches primary missionary) who is being shorted so the church can feel good about their missions giving. I saw a church with a 100 thousand dollar annual missions budget tell a Pastor they could not give him a raise until giving was better. His compensation was already less than normal and less than needed. But they took great pride in being missions minded!

Frank and Sense!

Chip Van Emmerik's picture

T Howard wrote:
Why, in general, is it expected that a pastor who has an advanced theological degree and ministry experience get paid less than a businessman with an MBA or an attorney with a JD?

Why is it expected that pastoral salary be established on business principles? Why is it assumed the pastor should make as much as the average church member? God has promised to meet our needs. Your needs are not necessarily the same as mine, but God has promised to provide for our respective needs. It seems to me that salary based on need is closer to the biblical pattern than following the world's business cycle.

Why is it that my voice always seems to be loudest when I am saying the dumbest things?

Chip Van Emmerik's picture

Bob T. wrote:
To be safe a church should get hold of the local high school teachers compensation scale. Take the amount a high school teacher with the same years of experience would get. Then double it so as to meet double honor standard.

I don't think the double honor mentioned in Scripture is a reference to monitary issues.

Why is it that my voice always seems to be loudest when I am saying the dumbest things?

Matthew Olmstead's picture

Chip Van Emmerik wrote:
Bob T. wrote:
To be safe a church should get hold of the local high school teachers compensation scale. Take the amount a high school teacher with the same years of experience would get. Then double it so as to meet double honor standard.

I don't think the double honor mentioned in Scripture is a reference to monitary issues.

I think you hold the minority viewpoint on this one. I've heard one prominent leader say that the double honor standard means that churches ought to take the average of the church members and double it.

Father of three, husband of one, servant of the Lord Jesus Christ. I blog at mattolmstead.com.

Becky Petersen's picture

Matthew Olmstead wrote:
Chip Van Emmerik wrote:
Bob T. wrote:
To be safe a church should get hold of the local high school teachers compensation scale. Take the amount a high school teacher with the same years of experience would get. Then double it so as to meet double honor standard.

I don't think the double honor mentioned in Scripture is a reference to monitary issues.

I think you hold the minority viewpoint on this one. I've heard one prominent leader say that the double honor standard means that churches ought to take the average of the church members and double it.

No matter what people say it means, I'm not aware of any pastor that actually makes "double" of any public school teacher in his town. Of course, I'm not exactly aware of what pastors make in general, or specifically, for that matter. But according to the formula Bob T. gave above, wouldn't you be in the 60-100K range for salary plus benefits?

rogercarlson's picture

Becky,

Probably. I am not even at a third of that...LOL

Roger Carlson, Pastor
Berean Baptist Church

Pages