Becky Head, Chair Bobby Bailey, Britt Green, Kelly Jones, Anna Speir

Transcription

1 Greetings in the Name of Christ: This report is the result of the combined efforts of the Layman s Salary Study Committee, a subcommittee of the Executive Committee, and selected members of the State Board of Missions staff. The committee consists of laypersons from Alabama Baptist churches. This report is an online resource at This is not a salary recommendation. It is a report of actual responses from a recent survey. We feel this report is a useful tool in helping church leaders consider what to offer church employees in salary and benefits. Please use it as a guideline. If you have any questions, call , ext. 208, at the State Board of Missions. Printed copies of the report are available in limited quantities upon request from the same phone number. Customized reports are also available including compensation based upon tenure and education. If you would like to develop a report customized specifically for your church, you may do so on our web site at Click on Salary Studies, then click on the National study. This report may be used by persons in your church who deal with staff salaries/and benefits. Thank you for helping care for the financial needs of your employees. Sincerely, The Layman s Salary Study Committee Becky Head, Chair Bobby Bailey, Britt Green, Kelly Jones, Anna Speir The Lord commands that those who preach the gospel should be supported by those who receive the gospel: In the same way, the Lord has commanded that those who preach the gospel should receive their living from the gospel. I Corinthians 9:14 NIV Those who are taught the Word must share in all good things with their teacher. Anyone who receives instruction in the word must share all good things with his instructor. Galatians 6:6 NIV The laborer of Christ deserves to be paid. And in the same house remain, eating and drinking such things as they give: for the labourer is worthy of his hire. Go not from house to house. Luke 10:7 KJV

2 2 General observations from the 2016 study Salary Planning Process Salary Planning involves several factors. This guide provides average salary information for various ministers and staff grouped by size and budget. The following factors should also be a part of the consideration. Churches should develop a process to examine these factors annually. 1. Cost of living adjustment 2. Merit increase 3. Total years of ministry experience 4. Tenure. Church health is generally enhanced by long tenured pastors and staff. 5. Education level of the employee Observation Number 1: Nationally, Pastors received a 3.4% increase over 2 years Compensation for full-time Southern Baptist received a 3.4% increase over the past 2 years compared to 1.1% inflation (CPI) according to LifeWay Research. In Alabama, however, the overall average for FT pastors and bivocational pastors saw mostly flat wages the past 2 years. In some of the church attendance categories, pastors did have an increase. Year Average Full Time SBC Pastor s Compensation 2012 $58, $59, $62,435 Observation Number 2: Nationally, other Ministerial Staff experienced an increase of 4.3% over 2 years Most staff ministers in Alabama saw a raise like the national increase over the past two years. This increase has come after 6 years of mostly flat wages. Observation Number 3: Alabama ministers are falling behind their national counterparts in benefits Medical insurance costs are a driving force in total financial support pastors in Alabama. Bivocational pastors are behind in Alabama by 50%. increases and represent a higher percentage of the financial support plan. ($900 behind in benefits). Benefits help protect the family and church, and Nationally, full time SBC pastors average about 12% more in benefits than provide meaningful tax savings. Observation Number 3: Ministry related expenses are not included in the total Churches are increasingly recognizing that expenses are not part of the compensation. Expenses should be considered totally independent of compensation and benefits and should be paid using an accountable reimbursement plan. This cannot be funded by salary reduction according to the IRS. The outdated concept of a pay package is the least acceptable way to provide compensation. This current SBC Compensation Study assumes all ministry-related expenses are paid by a church separately and are not a part of salary. Expenses include mileage; expenses for conventions and continuing education; expenses for ministry related books and periodicals; and ministry related hospitality expenses. Amounts to cover these ministry related expense are in addition to reported amounts in the survey. Observation Number 4: Continue vacation and sick pay for staff newly called to your church Pastor and staff should not be penalized for accepting God's call to your church. Do not make him start over on these because God has called him to your church. Base the minister s vacation or paid time off on total years of denominational service.

3 Observation Number 5: SBC-Wide Tenure increases slowly The length of time ministers and church employees are staying in the same church continues to increase for most church staff positions. Those responding to this question on the survey have averaged being at their current church as follows: SBC-Wide Positions 3,542 Full Time Pastors 9.0 (compared to 8.9 in 2014) 1,176 Bivocational Pastors 7.2 (compared to 7.0 in 2014) 3,025 Full Time Staff Ministers 7.5 (compared to 7.4 in 2014) 2,101 Bivocational Staff Ministers 6.5 (compared to 6.6 in 2014) 1,2 Full Time Office Personnel 11.1 (compared to 10.3 in 2014) 1,561 Part Time Office Personnel 8.1 (compared to 8.1 in 2014) 354 Full Time Custodians 10.1 (compared to 9.3 in 2014) 996 Part Time Custodians 7.7 (compared to 8.2 in 2014) Observation Number 6: Percentage of a Church Budget Used for Staff Compensation & Benefits Are we spending too much of our budget for staff compensation and benefits? When this question surfaces, the follow up question is often, "How much do other churches our size spend on their staff compensation and benefits?. The 2006 and 2014 SBC compensation studies posed that question. Below is the statistical data that provides the answer. The lowest reported percentage was 6%. The median reported percentage was 48% and the highest reported percentage was 90%. In SBC churches, the average percentage of their budget used for staff compensation and benefits continues to be 47%. Using the middle majority (15 th through 85 th percentile), 70% of churches reporting use from 36% to 58% of their budget for staff compensation and benefits. Report Based on Church Budget for All Reporting SBC Churches in the Study Churches Lowest Median Highest Average Middle Majority All Reporting SBC Churches in the Study 5,840 6% 48% 90% 47.1% 36% to 58% Observation Number 7: Social Security offset is needed Social security costs your minister twice as much as it costs your members. The minister pays a rate of 15.3% while non-minister employees pay 7.65%. Consider paying the difference of 7.65% as a Social Security offset. This should be paid by the church and should not be part of a package. If the church provides a Social Security offset, it is treated as taxable income. Observation Number 8: Compensation Differential due to Education According to LifeWay Research each additional education degree of any kind adds to a pastor s compensation. Seminary graduates receive, on average, $4,706 more. By degree: bachelor s degree: +$4,040; master s over bachelor s: +$2,171; doctorate over master s: +$11,151. Here is the data concerning Alabama pastors: High School or Less 2 Yr Associate Degree Some College- No Degree Bivo. Pastor Personal Income $15,454 (20) $15,543 (8) $17,922 (30) $16,052 (21) $25,650 (31) $22,126 (20) Protection Coverage $505 (20) $125 (8) $1,362 (30) $210 (21) $1,570 (31) $838 (20) FT Pastor Personal Income $47,834 (7) $48,144 (7) $48,736 (19) $57,606 (42) $64,310 (78) $77,172 (56) Protection Coverage $6,437 (7) $7,907 (7) $5,425 (19) $7,292 (42) $12,507 (78) $13,949 (56) Bachelor's Degree Master's Degree Graduate Degree 3

4 4 Compensation Planning: Pulling it all together Adapted from Compensation Planning Guide by GuideStone Financial Services of the Southern Baptist Convention 1. Determine the needs of church employees by completing a financial support review annually. The information provided from the review will be essential to completing the committee's work of financial support planning and completion of the financial support worksheet. 2. Put financial support policies in writing. Be sure to include the basics of financial support that include ministry-related expenses, employee benefits and personal income. 3. Budget for ministry-related expenses separately from employee benefits and personal income. Do not make your employees take this money out of their cash salary. 4. Establish an accountable reimbursement plan for the purpose of fully reimbursing all church employees for expenses incurred while doing the church's work. 5. Designate money in the church budget to pay for medical, life and disability coverage for all fulltime church employees. Do all you can financially to protect your employees and your church. 6. For each eligible employee, contribute a minimum of 10% of personal income (within legal limits) to the Church Retirement Plan as an employer contribution. Encourage employee participation through a Salary Reduction Agreement toward a total goal of 15% of salary plus housing (subject to legal limits). 7. If your church has an annual budget under $75,000, apply for the Mission/Church Six steps to compensation planning Determine the needs. Establish written financial support policies. Provide for ministry-related expenses. Provide employee benefits. Determine personal income. Complete a financial support worksheet. See page 5 Assistance Fund. Up to $3,000 in retirement contributions may be available to ministers participating in the Church Retirement Plan. 8. Provide additional income to all ministers equal to one-half of their Social Security taxes. Remember that ministers are self-employed for Social Security tax purposes and must pay both halves of that tax, which is in excess of 15%. Designate this additional income as a Social Security offset. 9. Budget for the employer's portion of FICA tax for non-ministerial church employees. Additionally, understand your federal payroll and employer reporting obligations and plan and budget for them. 10. Review the personal income of all church employees in comparison to the income of employees of other businesses or institutions in your town. 11. Consider providing a cost-of living increase to assure church employees salaries are keeping pace with inflation. See Review each church employee's job performance annually and provide merit increases when appropriate. 13. Designate the minister's housing allowance for eligible ministers. Remember that the housing allowance is one of two parts of the minister's personal income. Let the minister decide how this division should be made. 14. Complete the financial support worksheet for each church employee. This pulls the whole financial support planning process together.

5 Financial Support Worksheet for One method to examine the salary figures is to average the numbers from the various tables in this book. Remember that these are averages of salaries reported by the various churches. These are not recommendations. In addition, examine the median income in Alabama and your county contained in the table on page Compensation (Personal Income) Salary Housing Current Survey Proposed Personal Income Based on Attendance Page 8 or 10 Personal Income Based on Resident Membership Page 8, 9, 10 or 11 Personal Income Based on Budget Page 9 or 11 Personal Income Based on Experience Page 12 Average of 1 through 4 Sum of boxes 1, 2, 3 and 4 divided by 4 Transfer box 5 result to Box 11 Protection Benefits Based on Attendance Page 8 or 10 Protection Benefits Based on Resident Membership Page 8, 9, 10 or 11 Protection Benefits Based on Budget Page 9 or 11 Protection Benefits Based on Experience Page 12 Average of 6 through 9 Sum of boxes 6, 7, 8 and 9 divided by 4 Transfer box 10 result to Box Total Personal Income Protection Coverages (Benefits) Current Survey Proposed Retirement (10% recommended) Medical Insurance Term Life Insurance Disability Insurance Long Term Care Insurance Social Security offset (taxable) 12 Total Protection Coverages 3. Ministry Related Expenses (Business Expenses) Current Survey Proposed Transportation Travel (overnight conventions, etc) Books, Subscriptions Hospitality Total Ministry Expenses Total Financial Cost to Church 5

6 6 Consider the factors affecting compensation 1. Economic conditions of the community around the church (see Cost of living by Alabama County). Note: the counties in the table below are grouped together into metropolitan statistical areas. The MSAs are Birmingham, Decatur, Dothan, Florence-Muscle Shoals, Huntsville, Montgomery and Tuscaloosa. 2. The average salary of professionals within the church of like education and ability. 3. The actual cost of housing, utilities, maintenance, appliances, and furnishings for your area. 4. Other churches of similar size, budget, economic environment, cost of living and location. Estimated 2017 Median Family Income for Alabama Counties 1 County Source: HUD Office of Economic Affairs, Economic and Market Analysis Division, Median Family Income County Median Family Income County Median Family Income County Median Family Income Alabama $55,500 Colbert $53,500 Henry $58,300 Montgomery $59,700 Autauga $59,700 Conecuh $34,900 Houston $50,700 Morgan $57,700 Baldwin $61,500 Coosa $45,100 Jackson $47,000 Perry $31,100 Barbour $46,100 Covington $46,600 Jefferson $63,100 Pickens $42,100 Bibb $63,100 Crenshaw $51,000 Lamar $42,400 Pike $47,300 Blount $63,100 Cullman $48,000 Lauderdale $53,500 Randolph $46,400 Bullock $46,100 Dale $57,800 Lawrence $57,700 Russell $53,400 Butler $40,900 Dallas $38,900 Lee $59,200 St. Clair $63,100 Calhoun $53,000 DeKalb $48,700 Limestone $78,200 Shelby $63,100 Chambers $44,700 Elmore $59,700 Lowndes $59,700 Sumter $38,600 Cherokee $46,800 Escambia $38,000 Macon $42,300 Talladega $47,700 Chilton $52,700 Etowah $54,700 Madison $78,200 Tallapoosa $48,500 Choctaw $52,500 Fayette $45,200 Marengo $50,300 Tuscaloosa $61,100 Clarke $48,100 Franklin $46,900 Marion $43,500 Walker $46,800 Clay $44,100 Geneva $50,700 Marshall $43,000 Washington $53,700 Cleburne $48,400 Greene $29,800 Mobile $55,100 Wilcox $29,300 Coffee $61,500 Hale $61,100 Monroe $41,300 Winston $43,200 1 For more information about your particular community, you may contact Mickey Crawford at extension 281 and request the MFI.

7 Note: On the following tables the number within parentheses is the number of survey responses Comparison Data from Adjacent States Pastor Assoc. Pastor Administrator Education Worship/Music Youth Children Activities Multi-Role Office Staff Custodian Full-Time: Personal Income All Surveys $63,934 (3,542) $61,034 (906) $66,965 (311) $62,587 (535) $63,019 (799) $49,401 (962) $51,449 (525) $54,154 (194) $57,364 (1,241) $35,031 (1,243) $33,322 (354) Alabama $63,916 (211) $59,560 (46) $66,866 (19) $62,414 (33) $63,631 (64) $50,172 (56) $51,650 (25) $50,082 (16) $59,649 (83) $31,041 (64) $27,496 (13) Florida $65,486 (295) $62,249 (95) $69,292 (25) $62,473 (46) $64,044 (85) $50,901 (63) $52,197 (34) $59,169 (12) $60,542 (119) $32,964 (118) $34,919 (39) Georgia $70,089 (182) $62,878 (54) $65,795 (26) $59,719 (31) $62,335 (44) $48,219 (46) $50,938 (27) $44,299 (7) $59,115 (72) $36,989 (78) $31,243 (23) Tennessee $70,104 (369) $68,000 (88) $66,817 (33) $70,300 (51) $66,928 (85) $51,344 (120) $54,011 (75) $63,564 (25) $59,869 (127) $38,053 (202) $33,226 (51) Mississippi $63,115 (171) $68,212 (41) $76,648 (20) $64,728 (34) $67,314 (38) $52,701 (53) $53,045 (35) $55,200 (13) $60,166 (70) $34,260 (62) $35,522 (23) Full-Time: Protection Coverage All Surveys $12,031 (3,542) $13,218 (906) $14,670 (311) $13,558 (535) $14,237 (799) $10,539 (962) $10,511 (525) $12,232 (194) $12,063 (1,241) $5,640 (1,243) $5,455 (354) Alabama $10,915 (211) $11,117 (46) $12,777 (19) $11,001 (33) $14,351 (64) $8,198 (56) $7,496 (25) $8,308 (16) $11,684 (83) $3,891 (64) $2,972 (13) Florida $12,777 (295) $16,540 (95) $18,753 (25) $15,409 (46) $15,762 (85) $11,145 (63) $15,363 (34) $17,055 (12) $15,136 (119) $5,584 (118) $4,989 (39) Georgia $11,867 (182) $14,373 (54) $12,440 (26) $14,453 (31) $13,309 (44) $10,047 (46) $8,574 (27) $7,363 (7) $12,553 (72) $5,717 (78) $4,654 (23) Tennessee $13,204 (369) $13,583 (88) $15,538 (33) $16,063 (51) $14,719 (85) $11,969 (120) $11,851 (75) $14,758 (25) $13,563 (127) $5,919 (202) $5,992 (51) Mississippi $12,657 (171) $14,588 (41) $18,719 (20) $13,033 (34) $14,438 (38) $12,216 (53) $12,527 (35) $11,532 (13) $12,281 (70) $6,856 (62) $10,270 (23) Bivocational: Personal Income All Surveys $21,318 (1,176) $18,345 (224) $16,474 (34) $14,843 (82) $14,074 (1,004) $13,451 (559) $10,983 (367) $13,990 (45) $15,536 (323) $13,336 (1,561) $14,541 (996) Alabama $20,064 (131) $12,962 (18) $19,197 (3) $14,720 (7) $12,914 (88) $13,256 (42) $9,000 (34) (0) $13,452 (23) $12,245 (152) $14,257 (72) Florida $20,894 (80) $15,358 (22) (0) $12,436 (7) $13,617 (67) $12,160 (37) $10,244 (35) $14,336 (1) $14,426 (26) $12,496 (130) $12,540 (65) Georgia $23,678 (62) $29,649 (12) $16,384 (2) $9,175 (5) $14,992 (69) $16,888 (33) $9,169 (15) $7,578 (2) $20,212 (24) $12,529 (60) $14,638 (43) Tennessee $21,714 (146) $19,248 (24) $17,920 (2) $12,279 (7) $16,019 (135) $14,701 (78) $12,845 (45) $18,603 (3) $15,354 (35) $14,855 (221) $16,685 (143) Mississippi $21,991 (46) $22,095 (7) $4,096 (1) $58,368 (1) $18,663 (50) $16,795 (32) $11,928 (11) $18,309 (5) $21,892 (15) $12,680 (37) $16,142 (30) Bivocational: Protection Coverage All Surveys $1,882 (1,176) $967 (224) $2,117 (34) $939 (82) $424 (1,004) $446 (559) $925 (367) $1,982 (45) $1,057 (323) $318 (1,561) $101 (996) Alabama $952 (131) $242 (18) $1,737 (3) $309 (7) $99 (88) $481 (42) $524 (34) (0) $310 (23) $138 (152) $55 (72) Florida $1,216 (80) $1,005 (22) (0) $328 (7) $395 (67) $450 (37) $830 (35) $0 (1) $710 (26) $617 (130) $104 (65) Georgia $1,431 (62) $981 (12) $1,075 (2) $245 (5) $297 (69) $619 (33) $284 (15) $282 (2) $762 (24) $409 (60) $255 (43) Tennessee $1,339 (146) $430 (24) $1,536 (2) $0 (7) $430 (135) $104 (78) $404 (45) $0 (3) $134 (35) $276 (221) $22 (143) Mississippi $1,488 (46) $702 (7) $0 (1) $15,360 (1) $1,253 (50) $1,585 (32) $884 (11) $1,249 (5) $1,900 (15) $457 (37) $714 (30) Alabama Pastor Data Mean Median Age Years of Experience Years at Current Church 8 5 Average Attendance Resident Membership Budget $348, $169, Housing Allowance/Parsonage $13, $12, Salary $32, $30, Weeks of Vacation 2 2 Weeks of Revival 2 2 Alabama Pastor Data includes those who responded to the salary study Mean = The arithmetic average; sum of items divided by count of items Median = The central number; half of values are above and half below. 7

8 8 Note: On the following tables, the number within parentheses is the number of survey responses Averages for Full-Time Staff Based on Average Church Attendance (Higher of Worship or Sunday School) up Pastor Personal Income $32,667 (14) $46,706 (56) $53,681 (35) $66,120 (32) $69,931 (27) $84,538 (27) $109,923 (12) $112,405 (6) $127,247 (2) Protection Coverage $1,828 (14) $5,205 (56) $7,858 (35) $13,452 (32) $13,683 (27) $17,483 (27) $21,696 (12) $17,543 (6) $36,748 (2) Assoc. Pastor Personal Income (0) $53,149 (2) $37,721 (4) $48,871 (6) $56,693 (9) $66,623 (14) $73,565 (4) $69,227 (3) $61,108 (4) Protection Coverage (0) $2,390 (2) $6,382 (4) $5,386 (6) $3,990 (9) $11,279 (14) $24,479 (4) $16,633 (3) $26,777 (4) Administrator Personal Income (0) $55,245 (2) (0) $58,368 (1) $53,789 (2) $68,417 (10) $76,504 (1) $81,122 (2) $71,093 (1) Protection Coverage (0) $8,602 (2) (0) $0 (1) $0 (2) $12,524 (10) $34,776 (1) $13,555 (2) $38,423 (1) Education Personal Income (0) $65,434 (1) $40,818 (1) $49,681 (2) $50,695 (7) $61,873 (7) $74,167 (6) $68,281 (6) $70,460 (3) Protection Coverage (0) $0 (1) $3,231 (1) $4,424 (2) $4,595 (7) $13,679 (7) $12,948 (6) $16,530 (6) $15,388 (3) Worship/Music Personal Income (0) $50,451 (3) $46,285 (2) $55,640 (10) $55,848 (13) $67,027 (18) $76,261 (8) $74,183 (7) $70,067 (3) Protection Coverage (0) $7,327 (3) $4,093 (2) $12,108 (10) $14,578 (13) $15,063 (18) $16,327 (8) $12,094 (7) $30,433 (3) Youth Personal Income (0) $40,243 (1) $41,862 (4) $46,991 (9) $45,172 (10) $49,989 (15) $53,604 (8) $56,917 (5) $66,016 (4) Protection Coverage (0) $0 (1) $2,928 (4) $6,252 (9) $2,910 (10) $10,240 (15) $10,374 (8) $7,631 (5) $21,818 (4) Children Personal Income (0) (0) $39,729 (2) $47,524 (2) $49,262 (7) $52,867 (7) $49,645 (3) $69,718 (2) $56,731 (2) Protection Coverage (0) (0) $5,856 (2) $645 (2) $6,231 (7) $6,824 (7) $11,383 (3) $11,462 (2) $12,970 (2) Activities Personal Income (0) (0) $46,234 (1) $51,139 (3) $44,660 (4) $51,963 (4) $54,442 (2) $57,142 (1) $49,152 (1) Protection Coverage (0) (0) $8,187 (1) $430 (3) $9,848 (4) $6,989 (4) $17,564 (2) $20,976 (1) $0 (1) Multi-Role Personal Income (0) $50,451 (3) $41,653 (5) $52,098 (11) $53,615 (19) $64,952 (22) $68,418 (8) $68,965 (10) $66,704 (5) Protection Coverage (0) $7,327 (3) $2,989 (5) $7,340 (11) $5,282 (19) $13,493 (22) $23,082 (8) $15,883 (10) $22,286 (5) Office Staff Personal Income (0) $18,432 (1) $20,488 (8) $26,293 (10) $35,802 (11) $31,472 (12) $30,714 (14) $34,621 (4) $50,348 (4) Protection Coverage (0) $0 (1) $2,889 (8) $2,010 (10) $3,034 (11) $4,363 (12) $3,239 (14) $7,423 (4) $11,269 (4) Custodian Personal Income (0) (0) (0) $28,569 (1) $29,231 (5) $33,910 (2) $20,826 (3) $26,210 (2) (0) Protection Coverage (0) (0) (0) $9,614 (1) $1,035 (5) $1,792 (2) $1,816 (3) $7,407 (2) (0) Averages for Full-Time Staff Based on Church Resident Membership up Pastor Personal Income $43,263 (58) $53,470 (33) $60,960 (28) $60,242 (21) $73,148 (14) $76,167 (16) $83,986 (17) $94,134 (13) $121,992 (7) $123,078 (4) Protection Coverage $4,738 (58) $7,028 (33) $9,302 (28) $14,503 (21) $10,454 (14) $13,128 (16) $24,105 (17) $12,756 (13) $29,099 (7) $23,930 (4) Assoc. Pastor Personal Income $42,293 (3) $40,818 (1) $51,269 (7) $48,555 (7) $69,371 (2) $68,083 (6) $62,330 (7) $75,648 (4) $68,542 (5) $61,108 (4) Protection Coverage $2,583 (3) $3,231 (1) $6,054 (7) $6,697 (7) $8,784 (2) $8,786 (6) $8,406 (7) $9,417 (4) $27,447 (5) $26,777 (4) Administrator Personal Income (0) $45,056 (1) $56,570 (4) (0) (0) $72,467 (5) $78,632 (2) $61,692 (4) $80,825 (2) $71,093 (1) Protection Coverage (0) $17,203 (1) $8,257 (4) (0) (0) $7,672 (5) $16,486 (2) $10,155 (4) $21,074 (2) $38,423 (1) Education Personal Income (0) $40,818 (1) $50,712 (6) $50,003 (3) $55,194 (1) $65,799 (3) $57,380 (2) $68,338 (11) $78,036 (3) $70,460 (3) Protection Coverage (0) $3,231 (1) $5,006 (6) $13,671 (3) $0 (1) $11,032 (3) $18,697 (2) $10,008 (11) $20,669 (3) $15,388 (3) Worship/Music Personal Income $52,051 (3) $45,056 (1) $51,993 (9) $55,672 (8) $70,223 (5) $64,291 (8) $62,581 (12) $72,181 (7) $74,397 (6) $77,962 (5) Protection Coverage $13,775 (3) $17,203 (1) $16,177 (9) $11,317 (8) $7,781 (5) $14,309 (8) $13,700 (12) $16,471 (7) $16,572 (6) $18,260 (5) Youth Personal Income $43,008 (2) $36,733 (2) $44,922 (9) $48,713 (6) $53,500 (4) $52,467 (7) $46,949 (9) $50,113 (8) $56,963 (5) $66,016 (4) Protection Coverage $1,484 (2) $1,763 (2) $5,106 (9) $5,536 (6) $10,760 (4) $6,436 (7) $10,403 (9) $7,547 (8) $8,813 (5) $21,818 (4) Children Personal Income (0) $33,224 (1) $50,470 (4) $48,321 (4) $45,598 (1) $70,978 (2) $44,863 (5) $57,104 (3) $55,403 (3) $56,731 (2) Protection Coverage (0) $3,526 (1) $5,631 (4) $6,085 (4) $11,102 (1) $4,982 (2) $5,598 (5) $8,946 (3) $11,724 (3) $12,970 (2)

9 Activities Personal Income (0) (0) $48,410 (2) $48,146 (3) $45,598 (1) $60,416 (2) $48,778 (2) $46,013 (3) $54,442 (2) $49,152 (1) Protection Coverage (0) (0) $11,261 (2) $6,304 (3) $11,102 (1) $1,464 (2) $645 (2) $13,682 (3) $17,564 (2) $0 (1) Multi-Role Personal Income $42,293 (3) $39,699 (3) $51,567 (11) $51,167 (11) $62,164 (4) $70,078 (9) $60,054 (13) $64,438 (14) $67,909 (10) $66,704 (5) Protection Coverage $2,583 (3) $7,987 (3) $7,809 (11) $7,439 (11) $4,289 (4) $10,318 (9) $10,173 (13) $14,376 (14) $21,538 (10) $22,286 (5) Office Staff Personal Income $25,434 (2) $21,564 (5) $21,569 (7) $26,722 (4) $38,718 (7) $31,078 (4) $29,758 (12) $30,711 (13) $36,165 (6) $50,348 (4) Protection Coverage $1,623 (2) $963 (5) $2,732 (7) $2,807 (4) $487 (7) $1,637 (4) $6,655 (12) $1,707 (13) $8,928 (6) $11,269 (4) Custodian Personal Income (0) (0) (0) $25,168 (2) $32,307 (2) $31,206 (1) $28,569 (1) $26,060 (5) $26,210 (2) (0) Protection Coverage (0) (0) (0) $2,516 (2) $0 (2) $143 (1) $9,614 (1) $1,806 (5) $7,407 (2) (0) Averages for Full-Time Staff Based on Church Budget Up to 50k 50k 75k 75k 100k 100k 150k 150k 200k 200k 300k 300k 400k 400k 600k 600k 800k 800k-999k Million+ Pastor Personal Income $18,509 (4) $32,911 (4) $32,631 (9) $47,327 (22) $45,625 (22) $51,497 (43) $66,650 (32) $68,524 (19) $72,528 (14) $83,730 (7) $106,118 (34) Protection Coverage $1,114 (4) $2,308 (4) $2,240 (9) $4,700 (22) $6,921 (22) $8,999 (43) $7,421 (32) $16,143 (19) $20,391 (14) $12,527 (7) $20,752 (34) Assoc. Pastor Personal Income (0) (0) (0) $54,272 (1) $26,624 (1) $40,864 (1) $47,125 (5) $48,405 (10) $72,899 (2) $63,718 (5) $69,136 (20) Protection Coverage (0) (0) (0) $21,914 (1) $2,969 (1) $4,779 (1) $1,637 (5) $4,278 (10) $3,072 (2) $5,196 (5) $19,647 (20) Administrator Personal Income (0) (0) (0) (0) (0) (0) $51,901 (4) $68,663 (3) (0) $62,182 (4) $76,015 (8) Protection Coverage (0) (0) (0) (0) (0) (0) $4,301 (4) $12,349 (3) (0) $6,298 (4) $20,414 (8) Education Personal Income (0) (0) (0) (0) (0) (0) $49,120 (4) $50,674 (6) $52,480 (2) $69,086 (3) $69,273 (18) Protection Coverage (0) (0) (0) (0) (0) (0) $0 (4) $8,115 (6) $4,424 (2) $8,298 (3) $15,589 (18) Worship/Music Personal Income (0) (0) (0) $54,272 (1) (0) $43,600 (2) $48,599 (8) $59,955 (8) $60,882 (11) $62,256 (5) $72,511 (28) Protection Coverage (0) (0) (0) $21,914 (1) (0) $2,390 (2) $6,841 (8) $21,252 (8) $11,939 (11) $10,151 (5) $17,116 (28) Youth Personal Income (0) (0) (0) $54,272 (1) $26,624 (1) $46,336 (1) $43,725 (11) $44,518 (8) $50,726 (6) $54,452 (3) $55,778 (24) Protection Coverage (0) (0) (0) $21,914 (1) $2,969 (1) $0 (1) $3,220 (11) $2,100 (8) $10,601 (6) $6,220 (3) $12,442 (24) Children Personal Income (0) (0) (0) (0) (0) (0) $42,733 (3) $48,651 (7) $48,092 (2) $62,464 (1) $55,229 (11) Protection Coverage (0) (0) (0) (0) (0) (0) $3,904 (3) $4,367 (7) $12,719 (2) $2,929 (1) $10,613 (11) Activities Personal Income (0) (0) (0) (0) (0) (0) $52,301 (2) $44,620 (5) $48,092 (2) $53,248 (2) $54,187 (5) Protection Coverage (0) (0) (0) (0) (0) (0) $4,093 (2) $5,269 (5) $12,719 (2) $8,428 (2) $11,221 (5) Multi-Role Personal Income (0) (0) (0) $54,272 (1) $26,624 (1) $43,600 (2) $46,725 (10) $52,389 (16) $61,150 (9) $63,543 (8) $67,973 (34) Protection Coverage (0) (0) (0) $21,914 (1) $2,969 (1) $2,390 (2) $4,136 (10) $6,483 (16) $9,328 (9) $7,420 (8) $19,001 (34) Office Staff Personal Income (0) (0) (0) (0) $18,432 (1) $22,499 (5) $22,486 (7) $25,538 (7) $29,350 (6) $30,376 (6) $36,952 (30) Protection Coverage (0) (0) (0) (0) $0 (1) $2,918 (5) $2,366 (7) $2,131 (7) $3,277 (6) $2,864 (6) $4,836 (30) Custodian Personal Income (0) (0) (0) (0) (0) (0) (0) (0) $28,569 (1) $29,872 (5) $25,645 (7) Protection Coverage (0) (0) (0) (0) (0) (0) (0) (0) $9,614 (1) $1,752 (5) $2,894 (7) 9

10 10 Averages for Part-Time Staff Based on Average Church Attendance (Higher of Worship or Sunday School) up Pastor Personal Income $16,855 (91) $24,607 (31) $36,871 (9) (0) (0) (0) (0) (0) (0) Protection Coverage $459 (91) $1,252 (31) $4,904 (9) (0) (0) (0) (0) (0) (0) Assoc. Pastor Personal Income $3,441 (2) $14,891 (6) $13,750 (3) $15,924 (3) $7,680 (2) (0) $16,460 (1) $16,246 (1) (0) Protection Coverage $614 (2) $410 (6) $222 (3) $0 (3) $0 (2) (0) $0 (1) $0 (1) (0) Administrator Personal Income (0) $15,974 (1) $13,056 (1) $28,560 (1) (0) (0) (0) (0) (0) Protection Coverage (0) $0 (1) $0 (1) $5,212 (1) (0) (0) (0) (0) (0) Education Personal Income $2,212 (1) $16,435 (2) $13,056 (2) $16,536 (1) $25,313 (1) (0) (0) (0) (0) Protection Coverage $225 (1) $0 (2) $0 (2) $0 (1) $1,936 (1) (0) (0) (0) (0) Worship/Music Personal Income $12,346 (13) $11,944 (38) $13,371 (19) $15,181 (8) $14,584 (9) $15,360 (1) (0) (0) (0) Protection Coverage $131 (13) $50 (38) $45 (19) $336 (8) $177 (9) $0 (1) (0) (0) (0) Youth Personal Income $7,373 (2) $10,941 (11) $11,862 (15) $15,890 (7) $20,944 (6) (0) (0) (0) $6,827 (1) Protection Coverage $0 (2) $75 (11) $47 (15) $745 (7) $2,243 (6) (0) (0) (0) $0 (1) Children Personal Income $4,608 (1) $6,033 (6) $6,083 (11) $18,735 (2) $13,176 (6) $12,580 (1) $7,452 (2) $12,092 (3) $9,009 (2) Protection Coverage $0 (1) $115 (6) $0 (11) $2,606 (2) $528 (6) $0 (1) $1,331 (2) $0 (3) $3,038 (2) Activities Personal Income (0) (0) (0) (0) (0) (0) (0) (0) (0) Protection Coverage (0) (0) (0) (0) (0) (0) (0) (0) (0) Multi-Role Personal Income $6,001 (2) $14,168 (8) $14,121 (5) $17,048 (5) $5,120 (1) (0) (0) $16,246 (1) $6,827 (1) Protection Coverage $614 (2) $86 (8) $0 (5) $1,042 (5) $0 (1) (0) (0) $0 (1) $0 (1) Office Staff Personal Income $13,036 (16) $10,476 (39) $13,646 (24) $9,824 (10) $13,088 (21) $15,667 (6) $11,907 (27) $14,230 (9) (0) Protection Coverage $0 (16) $33 (39) $72 (24) $0 (10) $505 (21) $319 (6) $0 (27) $611 (9) (0) Custodian Personal Income $14,313 (23) $15,342 (15) $11,008 (8) $25,167 (4) $12,013 (11) $12,751 (6) $12,576 (3) $9,216 (1) $22,824 (1) Protection Coverage $0 (23) $56 (15) $0 (8) $0 (4) $0 (11) $0 (6) $0 (3) $3,109 (1) $0 (1) Averages for Part-Time Staff Based on Church Resident Membership up Pastor Personal Income $18,877 (116) $30,161 (11) $27,102 (3) (0) (0) $25,600 (1) (0) (0) (0) (0) Protection Coverage $953 (116) $857 (11) $922 (3) (0) (0) $1,958 (1) (0) (0) (0) (0) Assoc. Pastor Personal Income $11,794 (10) $14,003 (2) $14,472 (2) $10,240 (1) (0) (0) $15,484 (1) $16,353 (2) (0) (0) Protection Coverage $369 (10) $0 (2) $333 (2) $0 (1) (0) (0) $0 (1) $0 (2) (0) (0) Administrator Personal Income $15,974 (1) $13,056 (1) (0) (0) (0) (0) $28,560 (1) (0) (0) (0) Protection Coverage $0 (1) $0 (1) (0) (0) (0) (0) $5,212 (1) (0) (0) (0) Education Personal Income $15,309 (3) $7,634 (2) (0) $25,313 (1) (0) (0) $16,536 (1) (0) (0) (0) Protection Coverage $0 (3) $113 (2) (0) $1,936 (1) (0) (0) $0 (1) (0) (0) (0) Worship/Music Personal Income $12,376 (45) $12,554 (19) $12,179 (8) $11,821 (8) $15,018 (2) $20,705 (5) $15,484 (1) (0) (0) (0) Protection Coverage $77 (45) $64 (19) $290 (8) $0 (8) $54 (2) $319 (5) $0 (1) (0) (0) (0) Youth Personal Income $11,072 (13) $12,279 (8) $12,806 (8) $15,876 (6) $12,459 (3) $22,060 (2) $28,560 (1) (0) (0) $6,827 (1) Protection Coverage $0 (13) $0 (8) $88 (8) $2,243 (6) $275 (3) $0 (2) $5,212 (1) (0) (0) $0 (1) Children Personal Income $4,841 (12) $8,697 (4) $6,143 (6) $17,416 (3) $15,360 (1) $16,454 (1) $16,920 (3) $11,717 (2) (0) $9,009 (2) Protection Coverage $58 (12) $0 (4) $0 (6) $1,055 (3) $0 (1) $0 (1) $2,625 (3) $0 (2) (0) $3,038 (2)

11 Activities Personal Income (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) Protection Coverage (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) Multi-Role Personal Income $11,121 (11) $14,541 (6) $17,338 (1) (0) $15,360 (1) (0) $22,022 (2) $16,246 (1) (0) $6,827 (1) Protection Coverage $175 (11) $0 (6) $0 (1) (0) $0 (1) (0) $2,606 (2) $0 (1) (0) $0 (1) Office Staff Personal Income $11,298 (41) $11,314 (23) $14,413 (20) $12,366 (14) $14,987 (6) $13,092 (8) $10,812 (9) $12,387 (30) (0) $12,902 (1) Protection Coverage $12 (41) $56 (23) $0 (20) $838 (14) $0 (6) $12 (8) $213 (9) $183 (30) (0) $0 (1) Custodian Personal Income $15,123 (34) $11,598 (7) $12,010 (8) $9,171 (6) $12,315 (3) $12,672 (4) $20,039 (8) $9,216 (1) (0) $22,824 (1) Protection Coverage $25 (34) $0 (7) $0 (8) $0 (6) $0 (3) $0 (4) $0 (8) $3,109 (1) (0) $0 (1) Averages for Part-Time Staff Based on Church Budget Up to 50k 50k 75k 75k 100k 100k 150k 150k 200k 200k 300k 300k 400k 400k 600k 600k 800k 800k-999k Million+ Pastor Personal Income $12,569 (46) $18,174 (29) $20,450 (21) $28,608 (23) $36,977 (6) $41,856 (5) (0) $4,608 (1) (0) (0) (0) Protection Coverage $452 (46) $491 (29) $900 (21) $1,988 (23) $2,594 (6) $1,897 (5) (0) $0 (1) (0) (0) (0) Assoc. Pastor Personal Income (0) $0 (1) $6,881 (1) $14,063 (3) $16,567 (4) $13,607 (4) $10,240 (1) $10,302 (2) (0) (0) (0) Protection Coverage (0) $0 (1) $1,229 (1) $0 (3) $781 (4) $0 (4) $0 (1) $0 (2) (0) (0) (0) Administrator Personal Income (0) (0) (0) $15,974 (1) (0) $13,056 (1) (0) (0) $28,560 (1) (0) (0) Protection Coverage (0) (0) (0) $0 (1) (0) $0 (1) (0) (0) $5,212 (1) (0) (0) Education Personal Income $2,212 (1) (0) (0) $15,974 (1) $16,896 (1) $13,056 (2) (0) (0) $16,536 (1) $25,313 (1) (0) Protection Coverage $225 (1) (0) (0) $0 (1) $0 (1) $0 (2) (0) (0) $0 (1) $1,936 (1) (0) Worship/Music Personal Income $32,836 (3) $6,851 (3) $7,796 (7) $12,189 (18) $10,653 (12) $11,295 (27) $14,463 (8) $15,970 (9) (0) $51,200 (1) (0) Protection Coverage $157 (3) $0 (3) $176 (7) $99 (18) $71 (12) $76 (27) $92 (8) $0 (9) (0) $1,593 (1) (0) Youth Personal Income (0) (0) $6,758 (2) $14,227 (4) $8,370 (7) $13,126 (18) $12,595 (4) $22,052 (3) $20,424 (2) $27,250 (1) (0) Protection Coverage (0) (0) $0 (2) $0 (4) $101 (7) $46 (18) $0 (4) $3,840 (3) $2,606 (2) $1,936 (1) (0) Children Personal Income $4,608 (1) (0) (0) $7,188 (2) $4,942 (5) $7,402 (10) $14,694 (2) $7,168 (5) $28,560 (1) $25,313 (1) (0) Protection Coverage $0 (1) (0) (0) $346 (2) $0 (5) $0 (10) $614 (2) $0 (5) $5,212 (1) $1,936 (1) (0) Activities Personal Income (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) Protection Coverage (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) Multi-Role Personal Income (0) (0) $10,349 (3) $13,443 (5) $11,648 (2) $15,240 (7) $8,909 (1) $10,302 (2) $28,560 (1) (0) (0) Protection Coverage (0) (0) $410 (3) $138 (5) $0 (2) $0 (7) $0 (1) $0 (2) $5,212 (1) (0) (0) Office Staff Personal Income $9,157 (1) $13,565 (4) $9,845 (7) $11,475 (22) $10,146 (12) $12,159 (27) $12,968 (15) $14,589 (16) $11,981 (2) $12,173 (8) $12,599 (37) Protection Coverage $0 (1) $0 (4) $0 (7) $59 (22) $102 (12) $18 (27) $0 (15) $523 (16) $0 (2) $279 (8) $200 (37) Custodian Personal Income $9,142 (5) $16,542 (11) $14,755 (7) $19,811 (5) $13,670 (7) $11,328 (12) $11,735 (3) $11,232 (10) $27,515 (4) $10,598 (2) $14,343 (6) Protection Coverage $0 (5) $0 (11) $120 (7) $0 (5) $0 (7) $0 (12) $0 (3) $0 (10) $0 (4) $0 (2) $518 (6) 11

12 12 Average for Full Time Based on Education High School 2 yr associate Some College Bachelor Masters Graduate Pastor Personal Income $47,834 (7) $48,144 (7) $48,736 (19) $57,606 (42) $64,310 (78) $77,172 (56) Protection Coverage $6,437 (7) $7,907 (7) $5,425 (19) $7,292 (42) $12,507 (78) $13,949 (56) Assoc. Pastor Personal Income $40,818 (1) (0) $44,545 (5) $54,898 (15) $68,418 (22) $49,181 (3) Protection Coverage $3,231 (1) (0) $8,644 (5) $8,020 (15) $12,281 (22) $24,815 (3) Administrator Personal Income (0) $58,368 (1) $41,472 (1) $54,666 (5) $75,307 (10) $72,103 (2) Protection Coverage (0) $0 (1) $297 (1) $8,708 (5) $14,104 (10) $28,939 (2) Education Personal Income $40,818 (1) (0) $50,848 (3) $60,613 (10) $65,948 (18) $73,114 (1) Protection Coverage $3,231 (1) (0) $9,111 (3) $4,772 (10) $14,738 (18) $19,456 (1) Worship/Music Personal Income (0) $58,368 (1) $51,230 (4) $62,264 (31) $67,580 (27) $54,272 (1) Protection Coverage (0) $0 (1) $13,381 (4) $14,034 (31) $15,110 (27) $21,914 (1) Youth Personal Income (0) $58,368 (1) $43,744 (11) $49,610 (24) $53,957 (19) $54,272 (1) Protection Coverage (0) $0 (1) $6,130 (11) $6,802 (24) $10,868 (19) $21,914 (1) Children Personal Income (0) (0) $47,488 (2) $50,632 (12) $53,517 (11) (0) Protection Coverage (0) (0) $4,093 (2) $7,035 (12) $8,618 (11) (0) Activities Personal Income (0) $53,760 (2) $46,234 (1) $51,477 (8) $47,150 (5) (0) Protection Coverage (0) $0 (2) $8,187 (1) $10,213 (8) $8,608 (5) (0) Multi-Role Personal Income $40,818 (1) $58,368 (1) $47,244 (8) $57,150 (31) $64,195 (39) $66,160 (3) Protection Coverage $3,231 (1) $0 (1) $10,374 (8) $10,972 (31) $11,888 (39) $26,597 (3) Average for Full Time Based on Experience 1-5 Yrs 6-10 Yrs Yrs Yrs Yrs 31 Yrs + Pastor Personal Income $57,416 (11) $54,992 (24) $61,626 (34) $61,338 (32) $68,338 (52) $62,192 (58) Protection Coverage $6,903 (11) $7,816 (24) $13,943 (34) $11,505 (32) $11,326 (52) $9,559 (58) Assoc. Pastor Personal Income $32,931 (2) $54,680 (7) $54,704 (12) $57,813 (8) $70,542 (3) $64,023 (14) Protection Coverage $3,027 (2) $1,959 (7) $11,628 (12) $6,470 (8) $19,571 (3) $16,401 (14) Administrator Personal Income (0) $50,750 (2) $52,649 (3) $66,538 (3) $93,393 (1) $68,822 (10) Protection Coverage (0) $1,575 (2) $10,743 (3) $6,200 (3) $9,339 (1) $17,375 (10) Education Personal Income $39,861 (1) $74,000 (2) $57,661 (10) $55,418 (5) $54,480 (3) $67,199 (12) Protection Coverage $3,155 (1) $3,540 (2) $11,873 (10) $4,335 (5) $13,619 (3) $13,586 (12) Worship/Music Personal Income $57,741 (3) $54,104 (10) $58,386 (7) $63,837 (13) $71,754 (11) $61,741 (20) Protection Coverage $14,927 (3) $9,746 (10) $24,313 (7) $16,440 (13) $11,422 (11) $12,257 (20) Youth Personal Income $38,491 (10) $51,973 (17) $54,188 (10) $47,078 (12) $51,706 (5) $55,000 (2) Protection Coverage $6,802 (10) $7,120 (17) $13,811 (10) $6,340 (12) $4,735 (5) $10,700 (2) Children Personal Income $38,489 (5) $54,241 (8) $49,300 (3) $52,800 (4) $50,871 (4) $72,020 (1) Protection Coverage $3,877 (5) $4,915 (8) $6,433 (3) $4,032 (4) $16,873 (4) $21,386 (1) Activities Personal Income $48,000 (1) $48,500 (2) $50,588 (4) $45,534 (4) $46,749 (3) $56,402 (2) Protection Coverage $0 (1) $4,430 (2) $4,825 (4) $9,338 (4) $14,607 (3) $10,242 (2) Multi-Role Personal Income $45,571 (5) $54,519 (13) $53,765 (15) $56,983 (15) $61,161 (10) $65,015 (25) Protection Coverage $3,353 (5) $4,334 (13) $14,451 (15) $8,532 (15) $15,087 (10) $15,133 (25) This report includes: 1. Personal Income: Salary, Housing, Parsonage, and Social Security Offset 2. Protection Coverage: Medical/Life/Disability Insurance, and Retirement Contributions You must add the following (not included in this study): 3. Ministry Related Expenses: Transportation, Travel (overnight), Hospitality, Conventions, Conferences, Books/Subscriptions, etc. You must add these in order to form a complete financial support plan. See page 5. These figures are averages of salaries reported. 4. They are not a recommendation of compensation levels. In most cases, you should pay more than the average above. This study assumes all ministryrelated expenses are paid by the church using an accountable reimbursement plan and are NOT INCLUDED in compensation. See page 5 for a complete financial support plan sheet. Interim minister is usually paid between 25 and 35% of the minister s weekly Personal Income for Sunday and for Wednesday evening; and 20-25% for each additional day per week of service requested. In addition, you should reimburse ministry expenses. See Page 18.

13 Legal Issues for the Church as Employer The following issues are raised in order to help church leaders understand some of the legal implications facing the church. Neither the list nor the descriptions are intended as the final word. If your church needs additional information on these issues, please consult a qualified attorney. 1) Churches should stay up to date concerning new developments about the Affordable Care Act. An excellent resource may be found at Click on the Health Care Reform link on the right side of the page. (1) A group health insurance plan continues to be a tax-free benefit. Also a GuideStone plan is a tax free benefit. Finally, a group of one where there is only 1 full time employee serving the church remains a tax-free plan. There is a new small employer HRA found in the Cures Act which provides some help, but has several requirements. (2) Individual plans paid or reimbursed have ceased to be tax free. (3) Large churches having 50 or more Full Time Equivalents are required to provide health insurance to employees working 30 hours per week or more. 2) New DOL Overtime Rules were not put in place. The Fair Labor Standards Act applies to employers with one or more employees. It addresses issues such as minimum wage, overtime, and record-keeping requirements. Employees are either exempt or non-exempt and legal guidelines determine into which category an employee must be classified based on job responsibilities. Placing an employee on salary does not make him/her exempt. Any employee paid less than $455 a week is automatically non-exempt. Churches should require non-exempt employees to keep time sheets with hours worked. Ministers are usually exempt (even ministers who do not earn $455/week). 3) E-Verify and four other forms are required for each employee when hired (including ministers): They are the I-9 and E-Verify from the U.S. Citizenship and Immigration Services (USCIS); the NH-1 described under item four below; the W-4 from the IRS; and the A-4 from the Alabama Department of Revenue (ADOR). 4) New Hire Law: Alabama law requires employers with one or more employees to report to the Alabama Department of Industrial Relations the hiring, rehiring, or recalling of any employee. This may be submitted online at For more information, call the Alabama Department of Industrial Relations at (334) ) Worker s Compensation: An Alabama employer with five or more employees (includes part time and ministers) is required to provide this insurance. It protects the employer and employee in the event of a workrelated injury. Churches with less than five employees are liable for Worker s Compensation claims as well. They too should provide such coverage even though they are not legally required to do so. 13 6) Employee Handbook (a.k.a. Personnel Manual): If a church has an employee handbook, it should not include wording that implies a contractual commitment between the church and the employee. A statement that references Alabama s At Will status should also be included. This status means that the employment relationship can be ended by either the church or the employee without a reason or grounds. 7) Conduct background checks on all potential employees: Conduct a rigorous background investigation with a professional agency. Many services are available. See You must get proper signed release forms and conduct the background check in accordance with the new FCRA federal guidelines. 8) Incorporation: All churches should be incorporated for three reasons: (1) for the church to own property, (2) to protect members from personal loss if the church is found liable, (3) to protect the church from takeover. 9) Tax-exempt Status: Alabama does not exempt churches from sales tax. Churches are automatically exempt from federal and state property tax. They are also given the right to grant charitable contributions credit to those giving cash or non-cash gifts to, or for the use of, the church. Some vendors may ask church leaders for a 501(c)(3) exemption letter as proof of status. To receive such a letter, contact the SBC Executive Committee s Finance Office at 901 Commerce St., Nashville, Tennessee 37203, (615) ) Sexual Harassment: Make sure that your church has a sexual harassment policy that is clear. Make sure it is communicated to all employees. Churches should be free from any hostile work environment. Employees should understand the procedure for reporting situations and employers should always take complaints seriously. 11) Churches are excluded by law from the following: COBRA, Federal Unemployment Tax, and Alabama Unemployment Tax. 12) Age Discrimination in Employment Act 1967 (ADEA) and Age Discrimination Act of 1975: ADEA protects certain applicants and employees 40 years of age and older from discrimination on the basis of age in hiring, promotion, discharge, compensation, or terms, conditions or privileges of employment. 13) New Alabama Child Labor Law: Under the new system, work permits are no longer required for each minor employed. In its place, employers are required to obtain a Child Labor Certificate in order to employ minors.

14 14 14) Americans with Disability Act (ADA): Churches that employ 15 or more individuals generally are covered by Title I of the ADA. Covered employers are banned from discriminating against qualified individuals with disabilities in all aspects of employment. Churches generally are not covered under Title II of the ADA which covers accessibility to things like buildings and sidewalks. 15) Civil Rights Act of 1964: Prohibits employers from discriminating in any employment decision including hiring, discharge, compensation, and the terms, conditions, or privileges of employment on the basis of race, color, religion, sex, or national origin. Religious organizations, including churches, are exempt from the prohibition against discrimination based on religion, and the United States Supreme Court upheld the constitutionality of this provision in ) Family and Medical Leave Act (FMLA): The FMLA is applicable to churches with 50 or more employees each working day during at least 20 calendar weeks or more in the current or preceding calendar year. 17) Immigration Reform and Control Acts of 1986: All employees hired on or after June 1, 1987 must complete the top half of Form I-9 by the third day of work. Present a Form I-9 for inspection to an U.S. Citizenship and Immigration Services ( USCIS ) or Department of Labor officer upon request. Note that the Form I-9 is not filed with the government. Rather, it is retained by the employer for presentation to an appropriate government representative upon request. 18) Uniformed Services Employment and Reemployment Rights Act: Employees have the right to be reemployed if they leave to serve in the military provided: they tell you in advance, have 5 years or less in the services while under your employ, return to work in a timely manner, and have not been separated with a disqualifying discharge. They must be restored to the job and benefits they would have attained. For more information, call , extension 283 and request a Church Legal Issues guide. If you have questions, ask for Jim Swedenburg. Jim Swedenburg is a State Missionary. He is Director of Cooperative Program & Stewardship Development of the Alabama Baptist Convention, State Board of Missions. jswedenburg@alsbom.org 1) There are some issues every church must understand in dealing with employees ordained ones in particular. Consider these four major elements: a) Ordained ministers live under a dual tax status. They are employees for federal and state tax purposes and self-employed for Social Security purposes. b) Ordained ministers are exempt from income tax withholding. The minister may choose to pay taxes on a quarterly estimated basis or may choose voluntary withholding by completing box 6 on their W-4. c) Churches cannot pay FICA for a minister. Social Security offsets are included as regular income. d) Ordained ministers qualify for a housing allowance. The allowance applies to church-owned housing or housing owned or rented by the minister. If the church provides a pastorium to non-ordained employees, the fair rental value of the house/apartment must be recorded as taxable income on the person s W-2 at the end of the year. 2) Your church must have an employer identification number (EIN). This is not a tax-exempt number. There is no Alabama tax-exempt number that prevents a church from paying sales taxes on items purchased. To apply for a Federal EIN, call and request form SS-4 or Tax Issues for the Church as Employer For a State EIN, call or 3) Determine whether each church worker is an employee or self-employed. A seven-factor test issued by the IRS can help in making the determination. You must obtain the Social Security number from each worker employees on form W-4 and contract workers on form W-9. If a contract worker refuses to provide a SS number on a form W-9, the church must withhold 28% of the total compensation as back-up withholding. 4) Each employee must have a form W-4 on file for the current year. This form is used to claim withholding allowances. Ordained employees may use the form to elect voluntary withholding. New employees should complete the form when they begin employment, on or before the fifth day of work. This should be repeated prior to January 1 each year. 5) Compute each employee s taxable wages. The following items will generally be counted as wages and entered on the employee s W-2: salary, bonuses, Christmas and other special occasion gifts (love offerings), Social Security offset for ordained persons, personal use of a church-owned vehicle, purchases of church property for less than fair market value, business expense reimbursements under a non-accountable reimbursement plan, imputed interest on below-market interest church loans, most reimbursements of spouse travel expenses, and forgiven debts. Generally, if funds are given to church employees that pass through, or are collected by