Many churches are beginning to look at their budgets for next year. Some churches are beginning to see signs of recovery within their congregations, and subsequently have hope for increased offerings in the future. Many still have not realized this yet, however.
RumboughAs you contemplate how to manage your church’s missions and ministries expenditures, consider the salary you are paying your pastor.
Did you know that you could give your pastor a raise without increasing your budget dollars? It is all in how you categorize his compensation.
For example, many churches still give their pastor one lump sum dollar amount, and he has to use this amount for work expenses, such as books and mileage, as well as his personal living expenses.
Another example is not distinguishing between salary and housing allowance. These two items, if recategorized, would save your pastor hundreds of dollars in taxes, thus giving him more money in his pocket to take care of his family.
If the church can afford to increase the dollar amount allocated to the pastor, then consider what other needs he may have.
Is the church contributing to a retirement account for him? There are many pastors who would like to retire, but because they have little to nothing in their retirement account, they have to continue to work many years past their retirement age. How much should you contribute? Check with your local Baptist associational office, or the South Carolina Baptist Convention stewardship office. They can give you specific guidance on how to get retirement, health insurance, and other benefits started for your pastor.
Remember, we as members are responsible to take care of our pastors physically so that they can adequately take care of us spiritually. Show your pastor that he is truly “a workman worthy of his hire.”
– Rumbough, CPA, CFP, is chief operations officer with the Baptist Foundation of South Carolina. Contact her at 800-723-7242. In accordance with IRS Circular 230, any U.S. federal tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.