CLERGY
COMPENSATION
GUIDELINES
2008-2009
UNITED
Clergy Compensation Guidelines
207 846 5118
1 800 244 0937
2009 CLERGY COMPENSATION GUIDE
From the Clergy Compensation Task Force
Of the Commission for Spiritual Life
We
were guided by the following principles:
Compensation should be fair and just,
taking into consideration the size of the church and the clergy person's
experience, skills, and education. Other practical factors that churches must
consider are their income and their geographical setting.
Churches whose size and/or income make it
impossible to approach these guidelines should consider options that fit their
budget while treating their clergy with fairness and integrity.
How Do
We Decide?
How we decide is almost as important as
what we decide. In every church, some process needs to be in place for the
regular, annual review of employee compensation. Some group within the church
(i.e. Pastoral Relations, Personnel, etc) needs to have responsibility for the process.
This booklet deals with clergy compensation, but regular review of compensation
for other church staff members is just as important.
The process for reviewing clergy
compensation should be one in which the professional person (i.e. the clergy)
is a full participant. Pastors have a right, and indeed an obligation, to share
with an appropriate designated body whatever feelings, hopes, and needs they
may have with regard to compensation. Even in situations where resources are
severely limited and the church is unable to pay what it might like to, the
fact that the pastor has been consulted is very important in terms of clergy
morale and open communication.
We suggest that in each church, a small
committee, perhaps a Personnel Committee, be given the task of initial
negotiations with the pastor or pastors each year, several months before the
next year’s budget is drafted. Recommendations for changes in compensation can
be forwarded from this group to be included in the budget-building process.
Ideally, the same committee, which initiates compensation recommendations, will
also be involved in defining and evaluating the pastor’s work on a regular
basis.
What
Factors Should Be Considered?
The size of your church Smaller congregations generally pay less than
larger ones although there are exceptions to this pattern. The guidelines which
follow recognize that church size may make a difference in a church’s ability
to compensate its pastor and in the demands the church places on its pastor.
The experience and skills of your
pastor Generally, pastors who have
served in ministry for several years will possess more skills than those whose
experience is limited. It is appropriate that acquired skills and advanced
training be recognized with a higher salary. The Conference guidelines provide
salary ranges. The more experience and skilled your pastor is, the higher in
the guideline range you should expect his or her salary to be.
Your assessment of your pastor’s
performance Pastors who have
performed well in meeting the needs of the congregation should receive a
performance increase.
The cost of living The cost of goods and services rises nearly every
year and clergy compensation should be adjusted accordingly. Otherwise, simply
maintaining the same salary will reduce the pastor’s purchasing ability. We
suggest that you adjust your pastor’s specific salary based on performance and
the cost-of-living index (COLA).
SALARY
GUIDELINES
Salary guideline figures for 2008-2009 can
be found at the end of this document
Where a parsonage is not provided, a
housing allowance of 30 percent of salary is recommended.
The recommended COLA for 2008 is 3%. However, the Commission for Spiritual Life
recommends that the percentage be 4% in order to raise the pastor’s salary
rather than just give a cost-of-living increase.
CSL also recommends a cash package
sufficient to allow the minister to buy, furnish and maintain a median-priced
house in the church’s community:
The minimum cash package should be no less than 1/100 per month of the value of
a median-priced home in the community; (for example: if a median-priced house
in a community is $150,000, the church’s minimum cash package for housing would
be $2,000 per month, or $24,000 per annum.
Associate
Pastor
A full-time Associate Pastor’s salary is generally set at 70%-80% of the Senior
Pastor’s salary.
Benefits
and Employer Expenses
The figures above are for cash salary with parsonage or with housing allowance.
(See the Compensation Worksheet).
These additional items are usually part of a compensation package.
___Annuity – 14% ___Sabbatical Leave
___Health and Dental Insurance ___Study Leave
___Life and Disability Insurance ___Professional Expenses/Books
___Four Weeks Paid Vacation ___Maternity/Paternity Leave
___One-half Social Security tax ___Housing Equity Allowance
___Car/Transportation Expenses ___ Continuing Education
___ Conference, Meetings etc
All Clergy should receive at least an
annual cost of living increase based on the federal cost-of-living index (COLA)
as well as an increase based on the number of years served at the church,
expertise, performance and additional education.
The salary benefit and annual increase recommendations in these guidelines are
based on a consideration of:
a. Clergy compensation currently provided by Maine UCC churches;
b. Compensation provided by Maine churches of other mainline Protestant
Denominations;
c. Compensation provided by UCC congregations in neighboring states;
d. Compensation for other professional positions, which require a similar
amount of education and responsibility (i.e. educators).
See
actual cost examples at rear of Booklet
Part-Time
Compensation*
Churches that cannot afford the recommended full-time compensation (salary plus
benefits) may consider offering fair part-time compensation. Fairness is the
key because without it a congregation may have unrealistic expectations of
a part-time clergy person. One approach to negotiating a fair part-time
congregation-clergy covenant is to look at the responsibilities in terms of
units. A morning, afternoon or evening would constitute one unit of work. For
example, a pastor who spends a morning on worship preparation, the afternoon on
hospital visits and the evening at a trustee meeting would work three units
that day.
A full-time pastoral position would
involve 10 to 14 units a week, depending on the season, emergencies and other
situations, but should average 12 units a week over the course of a year.
Three-quarter time compensation would average 9 units while half-time
compensation would average 6 units.
This approach allows a congregation to set
priorities and provides considerable flexibility. Lay people might prepare the
newsletter, teach an adult Bible study or make routine visits to shuts-in,
freeing the part-time clergy person to concentrate on worship preparation and a
limited number of meetings, counseling sessions and crisis visitation. In this
way, a church may provide a professional-level ministry with a part-time
pastor.
Imaginative approaches to bi-vocational
ministry offer another option. Churches with part-time ministers might explore
innovative ways to attract clergy by investigating other part-time employment
opportunities in their communities and listing them in their search profiles.
Especially as more people enter the ministry after working in other areas, this
approach offers possibilities.
*Part-time
Employment Compensation Guidelines
Congregations who call pastors to less than full-time service should use the
salary guidelines to determine the recommended minimum salary for full time
service for their church and their pastor's experience and then multiply that
salary by the percentage of full-time service worked by the part-time pastor.
(Example: A church with 100 members and a parsonage hires a part-time minister
for half-time. The recommended cash minimum salary is $29,886.00 (Salary Grid)
x (50%) or $14,943.)
1. Clergy employed 24 hours or more per
week should receive a percentage of housing and all benefits equal to their
percentage of part-time employment.
2. Part-time clergy need to receive
expense offsets for mileage, books and meetings.
3. Part-time clergy & churches are
urged to arrange compensation agreement as best suits the particulars of each
clergy regarding Income Tax Liability.
CLERGY
UNITS
The following suggests unit assignments
for the most common clergy responsibilities:
Responsibility
Units Per Week
Worship Preparation
2-4
Sunday Worship/Coffee Hour 1
Visitation 2-3
__Those in need – shut-ins, hospitalized, etc.
__other church members
Administration 1-2
Meetings 2-3
__in the church
__in the community- local clergy,
UCC Association, Conference, etc.
Counseling, Weddings, Funerals 1
Preparing and Teaching Bible Study 1-2
Communication- bulletin/newsletter 1-2
Community Chaplaincy - nursing home, 1
jail, hospital, etc.
Other
Compensation
While the housing allowance in lieu of a parsonage is calculated at 30 percent
of cash salary, actual clergy need depends on location. Housing cost is likely
to be significantly higher in southern
Churches which provide parsonages should
also provide a housing equity allowance. Lay people may assume that clergy who
are provided with parsonages are freed from concern about mortgages. Pastors,
however, who have lived in parsonages throughout their career, often retire
with few funds for retirement housing because they have not accumulated equity
in their own homes through those career years. Thus a two percent (2%) housing
equity allowance is recommended.
Sabbatical
We recommend that a three-month sabbatical leave be provided to full-time
pastors for every five years of service. Churches are advised to save for this
expense in their operating budget over the five-year period.
Health
Insurance
Finally, we strongly recommend that pastors be enrolled in the UCC health
insurance plan because it assures portability and continuity. That is, as
pastors move to new parishes, they can take their health insurance with them.
We recommend that pastors be provided with this health insurance even if their
spouses/partners can obtain family coverage at their own place of employment to
ensure continuous clergy coverage in the case of divorce or death of a
spouse/partner. We also recommend that clergy with families be provided with
full family health and dental insurance coverage.
The Life Insurance and Disability Plan offered through
the UCC Pension Boards is vitally important coverage offered at a very modest
cost. This coverage should not be
neglected by either the pastor or the congregation. The Plan actually helps protect the church as
well as the pastor.
This
plan through the UCC Pension Board provides disability income and term life
insurance for your pastor. The premium
is 1.5% of the same "salary basis" used previously to compute the
annuity. The Plan provides benefits in the event of
death or disability. The Plan has three key parts:
1. life insurance program,
2. short-term
disability program that can replace a portion of income for up to five months,
and
3. long-term
disability program that can replace a portion of income when a disability
continues beyond six months.
If
your minister is new to the UCC ministry, it is important that he or she apply
for the Life Insurance and Disability Plan within the first 90 days of arriving
in their ministry setting. Failure to do
so may result in having to pass medical exams in order to be eligible for
coverage. Such exams can result in the
denial of coverage.
Flexible
Spending Account Plan
Through the Pension Boards, local churches
participating in the UCC Health Benefit Plans may establish a Flexible Spending
Account for clergy. Aside from a modest
initial set-up fee, making this Account available does not have a cost to the
local church as it is funded by the clergy person’s voluntary salary
redirection into the Account. The
Account provides participants with tax-savings related to medical deductibles,
co-pays and dependent care expenses and is an attractive addition to a
compensation arrangement.
How
Should We Present the Pastor’s Compensation in the Church Budget?
Given the fact that people inevitably make comparisons between their own
earnings and those of the pastor, thought needs to be given to the way this
information is presented in the church budget. In view of this, we recommend
that a budget format be used which clearly distinguishes between those line
items which are in the category of “salary” and those which are employer costs.
In the case of a pastor, it is reasonable to include both cash salary and a
housing allowance or provided parsonage as salary items, comparable to what a
layperson’s salary would include.
We recommend that all other compensation
items be listed as “employer expenses,” because they are the equivalent of
items regarded that way outside the church. Retirement and health plans are
fringe benefits that other employees also receive. A Social Security allowance
is equivalent to the employer’s share paid on behalf of other employees. Auto
and other expense allowances also have their equivalents in the secular world,
where they are regarded as basic costs of doing business.
Parsonage/Housing
Allowance
Living in a Parsonage is not as free as it looks. To be sure, the Church puts
up the capital investment, pays the taxes, utilities and repairs etc., but the
minister may serve an entire lifetime without building any equity in a house. A
list of pros and cons might look like this.
A parsonage
is helpful when:
Real estate costs in the community are so high clergy would not be able to buy.
The minister does not plan to stay long enough to make housing investment wise.
The pastor does not have to be concerned about taxes, utilities, repairs or
periodic renovation.
The pastor can easily decide to leave on short notice without having to sell
property.
A parsonage
is a disadvantage when:
A parsonage may not be either comfortable or convenient for the pastor’s family.
There is a felt lack of privacy in parsonage living.
In case of death or disability, the parsonage family must move as well as cope
with the loss.
Obviously what is an advantage for the
pastor may be a disadvantage for the church and vice versa.
In the past we have suggested a 2% equity allowance to help clergy who live in
parsonages save for future housing needs. A housing allowance can build equity
toward the time when the minister needs a retirement home. Housing equity is
also a major form of saving for most other people. A housing allowance gives
the minister a chance to build equity toward the time when through retirement
or disability s/he no longer has a church provided home.
Home
ownership carries tax advantages such as:
Ownership may represent a stronger commitment to the community.
A pastor’s voice is more likely to be heard in Community affairs if s/he is a
taxpayer as well as a resident.
Home
ownership also has disadvantages and include:
The possibility that the pastor might need to sell property to move.
The possibility that a retiring pastor will not feel as free to move from
his/her final parish.
The cost of ownership are often greater than some people realize.
Tax
Implications for Clergy Compensation
For most of us the Social Security tax we pay is withheld along with the
Federal Income Tax and we realize that our employer pays half of the total
while we pay the other half. Clergy are treated as “self-employed” for purposes
of Social Security so they pay the whole 15.3% tax. And they pay it on cash salary plus housing
provided. (Parsonage, figured at 30% of salary or fair market value, or actual
housing allowance.) For many ministers, this is by far the largest tax they
pay. This is why many Churches include a Social Security allowance equal to
what would otherwise be the employer’s share of the tax. Even though this
allowance is taxable as income, it can be helpful and also serve to remind
people that for clergy, housing is a mixed blessing. An additional booklet, A Negotiating Handbook for Congregations and Clergy is available
from the
A
Church’s Actual Cost for a Minister
To help churches avoid the “sticker shock” of how much it actually costs to
employ a full-time minister, the following examples are provided.
These two examples provide the “real cost”
to a church for a minister. One is for a small church of 100 members hiring an
entry-level pastor. The other is for a larger church in the 251-400 member
range hiring a mid to senior level pastor. The examples come right from the
Clergy Compensation Guidelines and DO NOT reflect geographical locations where
additional housing allowance must be provided to reflect higher than average
costs.
EXAMPLE #1: Entry-level church of under 100 members providing
a housing allowance and working full-time.
These figures are based on a 4% US recommended COLA increase. See grid at back of document for figures based
on 5% increase.
$29,886 Salary
8,966 Housing allowance (30% of
salary)
38,852 BASE COMPENSATION
2,972 Social Security (7.65 of
base)
5,000 Travel (this figure may need
to be raised for clergy in rural areas)
5,439
Retirement (14% of base)
583 Disability (1.5%
of base)
*12,256 Health (UCC sets rates)
*869 Dental (UCC sets
rates)
1,000 Books & Continuing
education
3,500 Sabbatical escrow (3 months after 5 years -
$500 increase from 2008)
$70,471 CHURCH’S ACTUAL COST FOR A MINISTER
*Two adults, estimated cost for 2008
IF A
PARSONAGE IS PROVIDED INSTEAD
..deduct housing allowance
..add maintenance, snow, lawn care, utilities, taxes
..add housing equity allowance (2% of salary)
EXAMPLE #2: Mid-level church of 251-400 members providing a
housing allowance
$47,519 Salary
14,256 Housing
allowance (30% of salary)
61,775 BASE
COMPENSATION
4,726 Social Security (7.65% of base)
5,000 Travel (this figure may need to be raised for
clergy in rural areas)
8,649 Retirement
(14% of base)
927 Disability (1.5% of base)
*12,256 Health (UCC sets rates)
*869 Dental (UCC sets rates)
1,000 Books & Continuing Education
5,000 Sabbatical escrow (3 months after 5 years)
$100,002
CHURCH’S ACTUAL COST FOR A MINISTER
*Two adults, estimated cost for 2007
IF A
PARSONAGE IS PROVIDED INSTEAD
..deduct housing allowance
..add maintenance, snow, lawn care, utilities, taxes
..add housing equity allowance (2% of salary)
CLERGY
COMPENSATION GUIDELINES SALARY SCHEDULE
Recommendations for Changes 2008-2009
Salary and Housing (4% increase)
Church Size
Salary With Parsonage
Under 100
members
$29,886 – 38,852
101-150 members
31,330 – 45,092
151-250
members 33,942 – 47,927
251-400
members
36,553 – 61,231
400+
members
39,151 – 66,578
Church
Size Salary With Housing Allowance
Under 100
members $38,852
– 50,508
101-150
members 40,730 – 58,621
151-250
members 44,125 – 62,306
251-400
members
47,519 – 79,600
400+
members
50,894 – 86,551
Salary and Housing (5% increase)
Church Size
Salary With Parsonage
Under 100 members
$30,174
– 39,226
101-150 members
31,631 – 45,526
151-250 members
34,269 – 48,388
251-400
members
36,904 – 61,820
400+
members
39,527 – 67,218
Church Size
Salary With Housing Allowance
Under 100
members
$39,226 – 50,993
101-150
members
41,121 – 59,184
151-250 members
44,549 – 62,906
251-400 members
47,976
– 80,365
400+
members
51,384 – 87,383
UCC
Health Plans
Listed below is information on the UCC
Health plans and costs for 2007 and estimated costs for 2008 which the
Conference uses. (As of May 1, the 2009
figures were not available.)
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ANNUALIZED* HEALTH AND DENTAL RATES |
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Rates for 2007 and 2008 (Non-Medicare) - Plan A |
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Coverage Type |
Quarterly Rate 2007 |
Annual Rate 2007 |
Annual Rate 2008 (est.) |
Quarterly Rate 2008 (est.) |
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One adult |
1,446.75 |
5,787.00 |
6,192.09 |
1,548.02 |
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Two adults |
2,863.50 |
11,454.00 |
12,255.78 |
3,063.95 |
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One adult with child(ren) |
2,817.00 |
11,268.00 |
12,056.76 |
3,014.19 |
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Two adults with child(ren) |
3,057.75 |
12,231.00 |
13,087.17 |
3,271.79 |
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Rates for 2007 and 2008 (Dental) |
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Coverage Type |
Quarterly Rate 2007 |
Annual Rate 2007 |
Annual Rate 2008 (est.) |
Quarterly Rate 2008 (est.) |
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One adult |
107.25 |
429.00 |
450.45 |
112.61 |
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Two adults |
207.00 |
828.00 |
869.40 |
217.35 |
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One adult with child(ren) |
210.00 |
840.00 |
882.00 |
220.50 |
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Two adults with child(ren) |
236.25 |
945.00 |
992.25 |
248.06 |
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Rates Health and Dental Combined for 2007 and 2008 (Non-Medicare) - Plan A |
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Coverage Type |
Quarterly Rate 2007 |
Annual Rate 2007 |
Annual Rate 2008 (est.) |
Quarterly Rate 2008 (est.) |
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One adult |
1,554.00 |
6,216.00 |
6,642.54 |
1,660.64 |
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Two adults |
3,070.50 |
12,282.00 |
13,125.18 |
3,281.30 |
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One adult with child(ren) |
3,027.00 |
12,108.00 |
12,938.76 |
3,234.69 |
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Two adults with child(ren) |
3,294.00 |
13,176.00 |
14,079.42 |
3,519.86 |