What do ministers really make?

How much do you make a year? Now, let me ask you another question. When you thought of that answer, did you include your health insurance benefits, your accident-life insurance, your car allowance, your Social Security, your pension fund?
   
Unless you are highly unusual, you did not include any of these benefits when you think in terms of how much you make each year. So why are many churches insistent upon including these benefits when they say how much their ministers make?
   
A totally deceptive answer to how much a minister “makes” is what many churches call “total package.” To come up with a “total package,” a church lumps together basic salary, housing allowance or parsonage, car allowance, utilities (if they are furnished), health insurance, convention expenses, life insurance, accident insurance and any other item that can possibly be tied to the minister’s benefit.
   
Or, a church will say, “We pay you $50,000 a year and how you divide up the money for various benefits is up to you.” So, the minister must decide, “Do I have a retirement program, or do I have more money to support my family now? Do I have health insurance or enough money to help my kids with their college educations?” But think for a minute — Is this fair, or even honest?
   
Suppose the church says the minister’s total package is $50,000 a year. What most churches do not figure is that a minister is self-employed and he must pay not 7.5 percent of his salary to Social Security, but 15 percent to self-employment. On the “total package,” that would be $7,500. This means that $50,000 immediately becomes $42,500.
  
A significant part of a “total package” is car expenses the minister incurs doing his job. (A farmer does not expect a hired person driving a tractor to provide the tractor and gasoline for the $6 an hour he is making, and the church should not expect the minister to provide his car to work for them.) A car and expenses to do his job can easily be $12,000 a year. That means the minister actually has a $30,500 salary.
   
Then, if the minister’s and his family’s health insurance is deducted from that amount, that can easily be another $6,000, ($6,000 is on the very low side) leaving him with $24,500 salary.
   
If an amount equal to 10 percent ($5,000) of his “total package” is placed in an annuity, as it should be, that leaves him with $19,500.  If the minister scrapes and travels and rooms with another minister going to conventions, that costs at least $1,000. If he buys books to stay current in his ministries, he will spend at least another $1,000. He now has $17,500 expendable income.
   
(Housing allowances and parsonages are more complicated issues and are not included here.)
   
So, that $50,000 package actually means the minister has $17,500 salary plus benefits. No other occupation this editor knows counts benefits as salary and there certainly is no such thing as a “total package.”
   
Every secular business knows what an employee costs the company is not what the employee gets.
   
But, some churches know the idea of “a total package of $50,000 a year” sounds much better than “an annual salary of $17,000 plus benefits.”
   
Praise God, churches are increasingly aware of the importance of benefits for their ministers. For decades, many were not.
   
Budget time in many churches is fast approaching. Hopefully, there will be members of the church’s budget committee and congregation who will “tell it like it is” when it comes to the salary and benefits ministers receive. The Bible says clearly that “a workman is worthy his hire” and this would certainly include straightforward figures and openness when dealing with them.
   
But the minister should not be expected to have “benefits” deducted from his salary.