How Much Should We Pay Our Staff?
One factor to consider when deciding how many staff your church should hire is the simple math of how much you pay them. Should you aim at lower compensation so you can hire more staff? What are the spiritual consequences of overpaying or underpaying your staff? Let me suggest two principles to guide your philosophy of staff compensation.
Every time the New Testament addresses financial support of church staff and missionaries, it underscores generosity.
- “The one who receives instruction in the word should share all good things with their instructor” (Gal. 6:6, emphasis mine).
- “The elders who direct the affairs of the church well are worthy of double honor, especially those whose work is preaching and teaching” (1 Tim. 5:17, emphasis mine).
- “Do your best to speed Zenas the lawyer and Apollos on their way; see that they lack nothing” (Titus 3:13 ESV, emphasis mine).
- “Please send them on their way in a manner that honors God” (3 John 6, emphasis mine).
Don’t be stingy with your staff compensation. What benefit is it to you for your pastor to be distracted from ministry because of financial needs? It is possible to be overly generous as well. Extravagant pay is poor stewardship and may warp a pastor’s motivations for ministry. After all, he is to be one who is “not pursuing dishonest gain, but eager to serve” (1 Pet. 5:2).
So what constitutes pay that is generous but not extravagant? As with beauty, it would seem that “generous” is in the eye of the beholder. As such, Paul’s exhortation in Titus 3:13 is a good summary of appropriate pay: “See that they lack nothing” (ESV). You shouldn’t try to provide your staff with everything they could ever wish for. But you want to provide enough that a pastor or staff member is not distracted from ministry because of financial concerns.
How can you be sure your staff are lacking nothing in this regard? I recommend five different data points that can guide your compensation decisions.
First, consider nonchurch benchmarks.
How are comparable public servants paid? Similar to pastors, many public officials have agreed to work for less money than they could make on the open market. Yet like a church, their employers don’t want them eventually forced into the private sector for want of money. You might find a useful comparison by looking at the compensation package of a local school principal or police chief, or the government pay scale.
You may also want to look at church benchmarks. How do other churches pay their staff? Several organizations will sell you benchmarking information for church staff positions in your area. Of course, churches are generally not known for being generous with their compensation. Don’t assume that all or even most churches in your benchmarking set are being faithful in paying their staff. Rather than buying benchmarking data, you might find it more useful to exchange compensation information with a few churches in your area that you trust in this regard.
Consider what replacement cost would be for this position. If a staff member were to leave, would you need to increase (or be able to decrease) the size of the compensation package in order to attract an individual who would do the job equally well? Then you are probably not paying what the work is worth and should consider revising what you are paying them.
Fourth, look through a sample personal budget. What makes for a sustainable family budget at different stages of life in your locality? Ask this question of several people in their fifties and sixties, as those much younger may not fully understand what it really costs to raise a family, and those who are older may no longer remember. Why do this if you are paying your staff based on their work rather than on their needs? Because compensation is not a purely deductive process and you should check what you think the work is worth against a typical level of need.
Finally, have some honest conversations. Ensure that someone in leadership in your church speaks regularly with your staff about how their compensation package is serving them and their families. Do they feel there is parity across staff? Are they finding their ministry hampered for want of money? Consider that feedback carefully.
That short phrase in Titus 3 is remarkably powerful in summarizing these goals for compensation. “See that they lack nothing.” Paying your pastor is one of the most important things your church budget can do. As such, unless your congregation really doesn’t have the money, one of your top budget priorities should be to pay a pastor and to ensure that his compensation is a help to his ministry, erring on the side of generosity.
How Much to Pay Administrative Staff
I find it interesting that Paul’s rationale to pay pastors in 1 Timothy 5:18 is not grounded in their office but their work: “The laborer deserves his wages.” As such, this principle offers rationale for paying administrative staff as well as a pastor. It implies that you should pay them what their work is worth, not how much you think they need.
But shouldn’t people working for a church make less money? No. If the laborer deserves his wages, he deserves what his work is worth. Evaluating what his work is “worth” might be complicated for a pastoral position, but it is comparatively straightforward for an administrative position.
Since administrative jobs are often similar to positions in other nonprofit organizations and businesses in your area, you might find that regional compensation surveys conducted by the government are a good guide. Some struggling churches might not be able to pay market rate for a time. But over the long term, adjust your staff size to fit the available budget.
In addition to generosity, consider the importance of trust. Several years before I began working as a pastor at my church, I served on our church’s compensation committee. I did this while working in a career in business, having no idea that the salary I was helping to set would one day be my own. I’m in the unique position of having designed a church compensation plan that I now live with! One lesson I’ve learned from that transition—from layman to staff pastor—is the inherent vulnerability of working for a church.
Consider, by way of analogy, the difference between working for a large corporation and working for your father’s small business. Both situations involve trust—but trust in a family-run company is different because the relationship extends beyond the business.
When I worked in the business world, my employer expected me to look out for myself, and I negotiated my compensation with that in mind. When I began to work for my church, however, the dynamic shifted. It was more like working for the family business. Of course, we discussed my compensation before I accepted the job, but not in the freewheeling way that’s expected in the for-profit world. The implicit agreement, now that I work for my church, is that I will spend my energy for them—and that they will care for me. When that vulnerability is held in trust, it makes for a wonderful working relationship between a pastor and his church.
As a church, hold that trust carefully. One way you can do that if you don’t work for a church is by understanding how your church’s pay package works. Do you know the tax burdens and benefits of working as a pastor? Do you know how much your pastor’s pay has increased in the last five years relative to inflation? Do you know how your church accounts for your pastor’s housing (which in the US has special tax treatment)? How confident are you that staff are paid in parity with each other, accounting for merit, experience, and education? If your general response is, “those details aren’t of interest to me,” or “it’s my pastor’s job to bring up any problems with compensation,” I would challenge you as to whether you fully appreciate the vulnerable place that your church staff are in.
What About Staff in Financial Distress?
What should a church do when its own staff are struggling financially? It is important in these situations to keep in mind the principle I outlined earlier from 1 Timothy 5, that it is a person’s labor that makes them worthy of pay. Here are some questions to ask when your staff are in financial hardship:
1. Is This Our Fault?
Has the church been underpaying for the work they receive? In that case, the church might provide a bonus to remedy this wrong in addition to adjusting compensation. A staff member’s level of need is not irrelevant to this assignment: only in unusual situations (as with a trainee) should a church hire a staff member knowing that compensation will not be sufficient to meet their needs.
2. Are They in the Wrong Job?
You should not increase compensation simply because a person’s needs have increased. It may be that this person’s needs are simply more than this job can support. In that case you might help them upskill so they can make a transition to a different job.
3. Are Finances Being Mismanaged?
Perhaps financial distress has come because a staff member doesn’t manage their money well. This may be cause for (1) questioning whether a pastor is disqualified from office by failing to “manage his own household well” (1 Tim. 3:4 ESV); and/ or (2) teaching them about financial management.
4. Do They Need Temporary Financial Help?
If they do, then assist them in a way that does not compromise their dignity or respect. Do be sure, however, to make it clear that this is benevolence and not compensation, as to not confuse Jesus’s principle that the worker is worthy of their wages. As is true with any use of benevolence funds, this is a good short-term solution but not a viable long-term solution.
 Three notes regarding compensation: (1) Do not assume that just because a compensation package worked for a person’s predecessor it will work for them as well. Different people have different needs (say, particular health issues or family they need to care for in a different country). (2) Some churches start with a benchmark and then subtract what a staff member would have given to the church, surmising that it’s more tax-efficient to not pay them this in the first place. Don’t do this! Since giving is one of the main purposes for income (Eph. 4:28) and pastors are to be examples to the flock (1 Pet. 5:3), don’t deprive pastors of the joy of giving simply because they work for a church. (3) Even if your pastor is single, it is wise to consider needs based on the needs of a family. After all, he may one day have a family, or even if he doesn’t, his replacement might. Don’t pay less merely because of the marital status of your pastor.
 A separation between benevolence and compensation is important in your communication to them, but the two may be indecipherable for tax reasons. Most likely, benevolence to a staff member will be seen by taxing authorities as taxable income.
Editor’s note: This article is adapted from Budgeting for a Healthy Church: Aligning Finances with Biblical Priorities for Ministry by Jamie Dunlop, ©2019. Used by permission of Zondervan.