CLERGY
COMPENSATION
GUIDELINES
2008
MAINE
CONFERENCE
UNITED CHURCH OF CHRIST
Clergy Compensation Guidelines
Maine
Conference of the United Church of Christ
PO Box 966
Yarmouth, Maine 04096
207 846 5118
1 800 244 0937
2008
CLERGY COMPENSATION GUIDE
Maine Conference UCC
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 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 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. 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.
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 and Housing
The following grid provides a range of recommended full-time clergy salaries for 2005-2006. Where a parsonage is not provided, a housing allowance of 30 percent of salary is recommended. This represents an increase of 2% as a cost of living adjustment and a pay raise. It also reflects what Maine Conference Churches actually paid in 2004-2005.
CHURCH SIZE SALARY WITH PARSONAGE
Under 100 members
$27,737 - 37,358
101 - 150 members 31,125 - 43,358
151 - 250 members 32,637 - 46,084
251 - 400 members 35,147 - 58,876
400+ members 37,645 - 64,017
CHURCH SIZE SALARY WITH HOUSING ALLOWANCE
Under 100 members
$37,358 - 48,565
101 - 150 members 39,163 - 56,366
151 - 250 members 42,428 - 59,910
251 - 400 members 45,691 - 76,538
400+ members 48,937 - 83,222
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 $1,500 per month, or $18,000 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 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 $27,087 (Salary Grid)
x (50%) or $13,543.)
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.
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 3-4
__Those in need – shut-ins, hospitalized, etc.
__other church members
Administration 1-2
Meetings 2-4
__in the church
__in the community- local clergy,
UCC Association, Conference, etc.
Counseling, Weddings, Funerals 1
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 Maine and along the coast than inland
and northern regions. There may be a difference between housing allowance compensation
from a church and the housing allowance a clergyperson may claim for IRS purposes.
See a specialized tax guide or consult a tax advisor.
Churches, which provide parsonages, should 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 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 assure 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 modist 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 diability income and term life insurance for your pastor. The premiumis 1.5% of teh 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 whan 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 with in the first 90 days or 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 resulti in the denial of coverage.
Flexibile
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 the 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 we pay the whole 15.3% tax. And we 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 we 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 help 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 being provided this year.
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 100 members providing a housing allowance:
$28,737 Salary
8,621 Housing allowance (30%
of salary)
37,358 BASE COMPENSATION
2,858 Social Security (7.65 of
base)
5,000 Car & Travel
5,230 Retirement (14% of base)
560 Disability
(1% of base)
50 Life
*12,256 Health (UCC sets rates)
*869 Dental (UCC
sets rates)
1000 Books &
Continuing education
3,000 Sabbatical escrow (3 months
after 5 years)
$68,131 CHURCH’S
ACTUAL COST FOR A MINISTER
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
$45,691 Salary
13,707 Housing allowance (30% of salary)
59,398 BASE COMPENSATION
4,544 Social Security (7.65%
of base)
5,000 Car & Travel
8,316 Retirement (14% of
base)
891 Disability
(1% of base)
50 Life
12,256 Health (UCC sets rates)
869 Dental
(UCC sets rates)
1,000 Books & Continuing
Education
4,500 Sabbatical escrow (3 months
after 5 years)
$96,774 CHURCH’S ACTUAL COST FOR A MINISTER
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 2007-2008
As of August 1, 2007, the federally recommended COLA was 3%. However, there are churches who may wish to increase the pastor’s salary beyond the COLA. Therefore, we are providing two charts; one with a 3% increase to last year’s salary and another giving a 4% increase.
Salary and Housing (3% increase)
Church Size Salary With Parsonage
Under 100 members $28,737 – 37,358
101-150 members 30,125 – 43,358
151-250 members 32,637 – 46,084
251-400 members 35,147 – 58,876
400+ members 37,645 – 64,017
Church Size Salary With Housing Allowance
Under 100 members $37,358 – 48,565
101-150 members 39,163 – 56,366
151-250 members 42,428 – 59,910
251-400 members 45,691 – 76,538
400+ members 48,937 – 83,222
Salary and Housing (4% increase)
Church Size Salary With Parsonage
Under 100 members $29,326 – 38,123
101-150 members 30,742 – 44,247
151-250 members 33,305 – 47,029
251-400 members 35,866 – 60,082
400+ members 38,417 – 65,329
Church Size Salary With Housing Allowance
Under 100 members $38,123 – 49,560
101-150 members 39,966 – 57,520
151-250 members 43,297 – 61,137
251-400 members 46,627 – 78,107
400+ members 49,941 – 84,927
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.
ANNUALIZED* HEALTH AND DENTAL RATES
Rates for 2007 and 2008 (Non-Medicare) - Plan A
Coverage Type Quarterly Rate 2007 Annual Rate 2007 Annual Rate 2008 (est.) Quarterly
Rate 2008 (est.)
One adult 1,446.75 5,787.00 6,192.09 1,548.02
Two adults 2,863.50 11,454.00 12,255.78 3,063.95
One adult with child(ren) 2,817.00 11,268.00 12,056.76 3,014.19
Two adults with child(ren) 3,057.75 12,231.00 13,087.17 3,271.79
Rates for 2007 and 2008 (Dental)
Coverage Type Quarterly Rate 2007 Annual Rate 2007 Annual Rate 2008 (est.) Quarterly
Rate 2008 (est.)
One adult 107.25 429.00 450.45 112.61
Two adults 207.00 828.00 869.40 217.35
One adult with child(ren) 210.00 840.00 882.00 220.50
Two adults with child(ren) 236.25 945.00 992.25 248.06
Rates Health and Dental Combined for 2007 and 2008 (Non-Medicare) - Plan A
Coverage Type Quarterly Rate 2007 Annual Rate 2007 Annual Rate 2008 (est.) Quarterly
Rate 2008 (est.)
One adult 1,554.00 6,216.00 6,642.54 1,660.64
Two adults 3,070.50 12,282.00 13,125.18 3,281.30
One adult with child(ren) 3,027.00 12,108.00 12,938.76 3,234.69
Two adults with child(ren) 3,294.00 13,176.00 14,079.42 3,519.86