5 Church Salary Tips for Small Churches

Salary is a contention point for every organization, but this is especially the case for churches. As a small church, it’s hard to know what hires to make, and deciding on a salary for those hires makes the decision making process even more difficult. Here are some factors to consider when making these decisions, brought to you by our experience with compensation studies here at Vanderbloemen.

[ If you're in the process of giving staff raises, check out this giving guide to assist the process ] 

1. Consider your geographic cost of living.

In this day and age, it’s easy to do a quick Google search and arrive at what seems to be a reasonable number for compensation. Don’t fall into this trap! The data you find online is often a conglomeration of information compiled into one giant average number. Accepting this as final truth is a disservice to both your organization and your future staff member – both things you want to avoid. Instead, look at the data and compare it to your church. Ensure the data is from churches of similar size and budgets, and make sure you adjust the final data for cost of living.

I recently did a cost of living adjustment at 153%, and another right after that at 97%. Cost of living across the US varies widely, so before you begin researching salary information, start with the cost of living for the area in which your future staff member will live and work. Almost equally important is the need to communicate these things with potential future hires. They may have to make considerable adjustments to their standard of living, and need to be aware of that before they ever agree to join your organization. This will help ensure you are hiring someone who will be a good long-term fit, and will avoid potentially uncomfortable discussions about salary and raises down the road.

2. Know your budget.

As a small church, growth should be anticipated. Not just in an “expect great things…” kind of way, but also in the area of financial forecasting. As your church grows, you will need to move part-time employees to full time status, and at some point hire more staff. These moments of growth should be able to be met with celebration, not with stress. The best way to do this is to be extremely familiar your budget and anticipate financial growth. Entrust your budget to more than one trusted individual and regularly check your financial progress and goals.

3. Consider non-monetary benefits.

Working on a church staff is unique for many reasons, one of them being the non-monetary benefits associated with church employment. Pastors are eligible for many unique benefits, including housing allowance, expense budgets, various tax breaks, free lunches, school stipends for children, sabbaticals, and the list goes on.

When assessing appropriate compensation for a pastoral position, these factors must be included. Do your research – determine what your organization offers that is unique, and incorporate that into your pay scale. Be realistic about the actual value of these benefits to your candidate (ex: a stipend for the education of children will not make much of a difference to a person whose children are already educated), and factor those things into your compensation.

Determining pay is not a one size fits all practice. 

4. Assess the risk of loss.

It’s important to assess the risk of loss for your key staff members. How much would you have to pay a new senior pastor if the planter of your church answered a new call? If your children’s ministry pastor left, how much momentum would your church lose overall? You should be asking these kinds of questions to determine pay.

Assess specific ministries’ growth and the overall value they add to your church. The people you determine add more value to your church should be compensated commensurately.

5. Regularly analyze pay.

We all want our church to have the most engaging worship, the most capable pastor, the best children’s programming, etc. We’ve talked a little about how to determine pay for potential candidates, but the second half of this discussion is how to keep the people you hire.

We write a lot about creating and maintaining contagious office culture, but the truth is that pay plays a factor as well. Be proactive about your staff’s pay. Assess performance and put plans in place to link performance to pay (think raises, bonuses, and additional vacation/sabbatical time) at least once a year. Analyze industry standards for similar roles in organizations within the size and scope of your church.

Good employees should be rewarded, no matter how small your church is. 

As I’ve said, there’s no easy answer for church compensation, but hopefully these tips are helpful as your church grows and expands.

How do you ensure your church staff members are paid a fair salary?