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Discussion in 'Pastoral Ministries' started by Gershom, Aug 23, 2008.
I thought this was an interesting piece.
ok, let me check my paystubs...carry the one, including insurance and my total comes out to: WAY BELOW $80K!!!
Just curious, and this may be for another thread: who has insurance through their church and who has to pay for their own coverage?
I do think it's misleading because of the added benefits that it includes - whereas when we speak of salaries, we don't normally include those.
I do know that our entire package is less than that, though.
Very true. I know someone who has a base salary of $40,000. Every year on their job they get a compensation report. When you factor in the cost of what they company pays for insurance, life insurance, and other benefits, they make twice that.
Not so for pastors.
I'd be curious to look at the data and sample. The TBC just put out their survey and I haven't look at it, but I'm sure it comes in well under this.
I just read the article. Small sample size. This is hardly a good survey
I teach in the public schools. While it is true that teachers are relatively underpaid for their level of education, and while the working conditions in some districts are pretty rotten, for the most part, teaching is a profession that has excellent working conditions, excellent hours, and a lot of time off.
As a retired Aircraft Maintenance Officer from the USAF, and after that working in industrial management for several years, I can tell you that industrial managers make a lot more than teachers, but they sure earn it!
In public school teaching, compensation is mainly due to education level and time spent on the job. In my state, you get BIG raises at the 4 year (tenure) point, and at the 10 year point.
I also get a bit of a kicker because I am National Board certified. Bottom line, I get paid $50K for working exactly 187 days a year.
Pastors work 365 days a year.
I work secular, not in the ministry. My fringe benefits come off the top of my gross, so it appears that they are factoring pastors' pay rates the same way. By this, the average pastor in this survey make quite a bit more than the average worker bee in secular jobs. Also, my companies don't pay for my housing or work related transportation costs, as well as most secular jobs don't either. Churches pay these cost, so that makes it even higher, related to secular anyway.
If you are paying for your house by using the money from your paycheck, then your employer does pay for your housing though indirectly. How is that different than the pastor's situation? Also, I'll disagree with you that most secular jobs don't pay for work related transportation costs. The vast majority do pay for them. Most people have no idea how much their benefits actually are. Adding that to most people's pay would put them much higher than they realize. That being said, $80,000 for a pastor is unheard of around here...it us usually much much less.
But let me ask...where in Scripture does it say that the pastor is supposed to make less than everyone in the church? And where does it say that he isn't supposed to make more?
Disagree or not, the average middle class job doesn't pay transportation cost. My house comes out after the rest, ministers' don't. There housing is provided a lot of the time.I wasn't saying he should make more OR less, I was comapring to secular jobs. Arguments from silence don't fly brother. Mine was just an observation, not a debate. As long a the preacher preaches true gospel about money, I'm glad for whatever he makes.
The housing is essentially equivalent to greater pay.
However, you also have to figure the difference in salary. Churches do not pay the employer's portion of the payroll tax, so you must take this out of the minister's package. The minister does get some relief from the housing allowance, but it doesn't always even out, especially for lower paid ministers.
Whenever I worked in churches, the housing allowance designation didn't help me all that much, when you consider that I had to pay SECA taxes. I had to pay just over seven and a half percent more on my entire salary and housing allowance, only to exempt a few thousand dollars a year from taxes. The extra seven on the whole package was more than the taxes I would have paid on the housing, if the employer's portion were paid.
See, I'm teachable, I never knew anything about SECA. Like I said, if they teach truth about money, I'm happy for whatever they get. I don't think my pastor makes 80K total. I would guess he makes somewhere in the neighborhood of 60K total, which still isn't bad for the area we live in. I think the average median around here for secular is around 30-35K.
No argument from silence here. Scripture has quite a bit to say about paying the pastor/elder.
A summary of how many ministers' salaries are reported (plenty of exceptions, but here goes...)
Most ministers are paid via a "salary package." Many include the following:
Some are provided a pastorium. Tax-burden wise, they have to pay SE tax on the "fair market" value. This can bite some pastors in the backside, if they are provided a house, but very little in the way of salary. The same is true if any utilities are provided.
Others are given a "housing allowance." This is non-taxable with regards to income tax, but it is taxable with regards to self-employment tax.
Most ministers' insurance coverage is lumped into their "salary package." So...if you spend $8K per year on insurance, this is deducted from your "salary."
Retirement is seldom an "extra." So...if you wish to contribute $3K per year, that is subtracted from your salary.
As has been mentioned, ministers are self-employed with regards to Social Security. Thus, they pay all of the SECA (not just "their half.")
Some churches still have "ministry related expenses" (a reimbursion account) as part of their salary package. That is not correct to do so, BTW...it should be a line item outside the salary. These re-imbursals are not taxable...but in some churches, they "count" toward the salary total.
I'm blessed to serve a church that is professional in how it conducts its salary and finances. I've also been blessed to serve churches that approach paying its ministers with the mindset of, "What can we afford to do for them?" rather than, "What can we get by with?"
But, as one can see...there is just a bit of "adjustment" when one goes to comparing a typical minister's salary with a salary from an employee in secular employment.
(Please don't take the above as complaining...it is explanation.)
I have only been a member of 3 churches in my life, and I do know that in all 3 the churches paid those taxes, and in all 3 SS was mentioned derogatorily in sermons as an incompetent system. Why did they not opt for more into their annuities instead? Why pay into-- umm, have the church pay into-- a system you are going to degrade?
As pastor, I receive $50 / month for transportation & $50 / month for housing. + I work 2 jobs.
For medical, I am a disabled vet. I only live 2 miles from the VA.:thumbs:
for retirement, well my wife is a bit younger than:love2:
There are some in here smarter than I on this subject...but churches should not be paying for ministers' SS. With regards to SS, ministers are self-employed, and are responsible for the tax burden themselves (i.e., quarterly tax estimates).
Ministers can opt out of SS, but this is dicey...one, because you must opt out because you are religiously opposed to receiving SS...not opposed fiscally (as I am, thinking it's a poor system), or opposed to paying...only recieving. I'd love to opt out, but I could not do it ethically, because my motive for doing so is not the exemption allowed.
Not to mention...many of the people who I know that have opted out of SS have been audited. It leads me to believe that opting out is a "red flag" for the KGB...er, IRS.
I pay as much as I can into my retirement...because I don't think SS will be around when I retire. And I do think SS is not a good system. But it's the law, and hey...since I pay in, maybe one day I'll get some out.
What some churches provide is a SS "offset" which is nothing more than additional salary that is also liable for SECA tax.
Canada is different than the USA. When I first started out pastors had no retirement plan and didn't receive enough money to pay for a private plan. Most of us figured we woud be preaching to the end of life.
Then came our government plan, which was optional at first, but most of us joined in and glad we did. We paid part and the church paid the employers part,,we are not self-employed. Some of us also invested some money into a progam that had small investment amounts. This plan has provided a substantial return in my retirement. The nxt thing we did was refuse to accept church owned housing and demanded a housing allowance in lieu of that house. This also provided us with a house upon retirement. Prior, retired preachers virtually became beggars.
A lot of changes have taken place over the years...or we got a little wiser in our years.
I forgot the $80.000.00 Pay. Was that over a lifetime? Try $25,000.00 tops. I did get $85,000.00 in 6 months once, but that was for architectural services..the church paid me ten dollars a week.
The Law does not say that one opting out is against receiving SS at all, it says that the one opting out has objections to pastoral compensation being part of the SS tax system. Bivocational pastors who have opted out of SS for pastoral compensation still have to pay into the system for their other work, unless that work is exempted (railroad workers and some others have alternate systems). I personally know several men in this situation.
Each church makes its own decisions about SS and staff. Most large churches I am aware of pay into the system. Our church has six pastoral staff members, two admin personnel and two custodial personnel, and all staff members are signed up for SS.
I know a man who is not on staff anywhere right now, but he has 30 years of paying into SS and ten years of paying into our state's alternative system for public school teachers, and he has a federal retirement. Though there are offsets, when all is said and done, this guy will be a triple-dipper--Federal pension, SS pension, teacher's pension.