You bet! Tax breaks, clergy discounts, free condo use; people can’t wait to press bills in your palm, give you free suits, tires, food, vacations. What a life!
Well, not exactly.
Here’s an average Rev. Joe, SBC pastor:
He preached yesterday at an average sized SBC church and saw 125 folks in his 11 am primary worship service. When he gets paid, he receives a salary of $46,000. This includes the one genuine tax break that ordained clergy receives, the housing allowance, which for Joe is $16,000. He is blessed to have his own home, complete with mortgage.
Joe’s church wisely and properly has an accountable reimbursement plan which allows Joe to log his business miles, keep receipts for expenses such as books etc, and receive a reimbursement check that is not taxable as income for either income tax or for Self Employment taxes. Joe expenses $8,000 for the year this way.
The church pays his insurance, for the family, spouse and two kids. This comes to around $8,000 per year and also makes a modest contribution to his retirement account, $5,000, not enough but he's grateful for it.
Health Ins 8,000
The LifeWay Compensation Study is a handy tool for checking out the pay of SBC clergy and staff. It shows Joe as being slightly above average but then Joe is slightly above average himself and, more importantly, his church is slightly above average.
Joe has knowledgeable members including a CPA who could look in the budget and surmise, rightly, that Joe will pay no income tax at all. This is because of the Housing Allowance which takes that $16,000 chunk off the table for income tax purposes.
The CPA would also understand that Joe would be paying Self Employment taxes on his W-2 salary and also on the $16,000 housing allowance. Those taxes on $46,000 would, at the 2010 rate of 15.3%, total $7,038. He hopes Joe is wise enough to set aside the $600 or so each month to make his quarterly payments of over $1,750.
The CPA doesn't have to get to a calculator to guess that Joe's largest bill, by far, after his mortgage is that tax bill. He is grateful that Joe is responsible with his finances, but then the CPA was the one on the search committee that insisted that the church get a credit report on Joe when they were considering him as their new pastor. Joe checked out OK, paid his bills on time, and had a good credit score.
Joe is in touch with the folks in his church and doesn’t complain about a total compensation package of around $70,000. He understands that just because he has a master’s degree earned by doing three years of post-college graduate study, his pay and benefits are determined not by his education but by the supply and demand for SBC pastors.
Joe is a realist. He knows that the Lord may send him to other churches but the likelihood is that he will pastor average-sized, single staff SBC churches all of his career. He is grateful that his wife will at some point work outside of the home because they will absolutely need that second income to plan for retirement.
Joe has disabused himself of thinking that because he is a pastor that someone, somehow, sometime will be there to take care of him financially. He trusts the Lord for that and watches his expenses. He has also weaned himself away from the attitude of entitlement that he sometimes observes among his colleagues.
So Joe keeps his nose to the grindstone. He doesn’t really have a backup plan, unless he can get called to a megachurch. Alas, there are only 177 SBC megachurches and somewhere over 50,000 SBC ministers.
Join the Christian ministry as an SBC pastor and serve the Lord, be blessed, be satisfied, be frustrated at times; meet wonderful people, gain close friends…but don’t expect to get rich. Just don’t complain about it.
[I welcome any correction, criticism, or observation from folks who are familiar with clergy pay. There may well be something I do not know.]