Maine
Conference of the United Church of Christ 
2
0
0
3
MAINE CONFERENCE OF THE UNITED CHURCH OF CHRIST
PO Box 966
Yarmouth, Maine 04096
207-846-5118
1-800-244-0937
Members of the Committee:
The Rev. Jean Alexander, Yarmouth
The Rev. Iris K. Burnell, Hampden
The Rev. John Zehring, Augusta
The Rev. Jeffrey Belcher, South Bristol
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 2002-2003. 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 2001.
Church Size
Salary with Salary with Parsonage
Housing Allowance
Under 100 Members $25,500 – 33,150
$33,150 – 44,415
101-150 Members 26,732
– 38,666
34,751 – 50,266
151-250 Members 28,960
– 40,894
37,647 – 57,091
251-400 Members 31,188
– 52,244
40,543 – 67,918
400 + Members
33,405 – 56,806
43,440
– 73,847
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.
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.
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.
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 $25,600 Salary
7,680 Housing allowance (30% of salary)
$33,280 BASE COMPENSATION
2,546 ½ Social Security (7.65% of base)
4,200 car and travel
4,659 retirement (14% of base)
333 disability (1% of base)
50 life
8,196 health (UCC sets rates)
624 dental (UCC sets rates)
600 books and continuing education
3,000 Sabbatical escrow (3 months after 5 years)
$57,488 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)
$52,320 PLUS PARSONAGE = Church’s actual cost
EXAMPLE #2: Mid-level church of 251-400 members
providing a housing allowance
$42,000 Salary
12,600 Housing allowance (30% of salary)
$54,600 BASE COMPENSATION
4,177 ½ Social Security (7.65% of base)
4,200 car and travel
7,644 retirement (14% of base)
546 disability (1% of base)
50 life
8,196 health (UCC sets rates)
624 dental (UCC sets rates)
1,000 books and continuing education
4,100 Sabbatical escrow (3 months after 5 years)
$85,137 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)
$76,377 PLUS PARSONAGE = Church’s actual cost
An additional booklet, A Negotiating Handbook for Congregations and Clergy
is being provided this year
2002 CLERGY COMPENSATION WORKSHEET
THIS YEAR NEXT YEAR
1.SALARY AND HOUSING
A. Cash Salary
__________ __________
B. Housing Allowance paid directly to pastor
Or value of parsonage (minimum value is
30% of cash salary)
__________ __________
2. BENEFITS
A. Retirement
i.UCC Pension Plan-14% of Salary & Housing
__________ __________
ii.Social Security Allowance -
Salary and Housing times 7.65%
__________
__________
iii.Housing Equity Allowance
(if minister is provided a parsonage)
2% of cash salary
__________ __________
B. Long Term Disability (Family Protection Plan)
1% of salary and housing
__________ __________
C. Group Life Insurance -- $50 per year
__________ __________
D. Health Insurance (2001 rates)
__________ __________
Single with dental
__________ __________
Single without dental
__________ __________
Family with dental
__________ __________
Family without dental
__________
__________
E. Vacation, 4 weeks
__________ __________
F. Maternity/paternity leave
__________ __________
3. REIMBURSEMENT FOR EMPLOYER EXPENSES
A. Auto (Current IRS guidelines)
__________ __________
B. Conference, Meetings, etc.
__________
__________
C. Continuing Education Allowance
__________ __________
D. Professional Expenses and Books
__________ __________
E. Study Leave weeks (i.e. 2 weeks)
__________ __________
Sabbatical Leave Escrow
__________ __________
F. Sabbatical Leave
(i.e. 3 months every 5 years)
__________ __________
4. OTHER
__________ __________
Home | Questions | Staff | Who
We Are | Directions | Policies
Guidelines Resources |
Pilgrim
Lodge | State Youth Council | Rockcraft
Retreat Center | Resource
Center | Links