Compensation Policies for Ministers and Paid Staff Meeting their Needs and Balancing the Budget

The Budget Pie Staff-50% Staff 45% Bill Hybel’s Wheel Missions 10% New Ministries 10% Existing Ministries 15% Savings 5% Building & Grounds 15% Rod’s Wheel

What Factors Should You Consider?

• • • • • •

Where you are located Size of your Church Staff Position Education Previous service Benefits

• • •

Housing Allowance Social Security Inflation

Where you are located

• • • • •

Cost of Living Commuting Office Space-church or home Compensation Trends in Your Community

– www.guidestone.org/budgetresources MSN Salary Study –

http://www.cbsalary.com/Salary Calculator.aspx?lr=cbmsn&siteid=cbmsn_home&specialty=&city=&state=&btnSubmit.x=80&btnSubmit.y=15

National Salary

Fresno, CA

Size of your Church

• • •

Larger churches should be able to do more Current debt Tithing issue

Staff Position

• • •

Senior Pastor, associate staff, secretary, janitor Ministerial or non-ministerial for tax purposes Full time, part time, bi-vocational

Education

• •

Bachelors, Masters, Doctorate Specialized training; Marriage and Family Counseling

Previous service

• • •

Where did he/she serve How long did he/she serve What notable projects, ministries did he/she accomplish

Determine Personal Income

• •

How to designate a housing allowance

•

Minister’s responsibility

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Present an estimate of housing expenses Church’s responsibility

•

Designate amount prior to paying minister

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Review annually

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Record it as set until changed by official decision

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Remember housing allowance limits

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Social Security & Inflation

• •

Social Security

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Did the minister opt out Inflation

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3.6% in 2011

It’s More than Money…

•

Policies should cover four major areas

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Ministry-related expenses

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Employee benefits

–

Personal income

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Personnel policies

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www.yourchurchmatters.com

–

http://www.guidestone.org/budgetresources

B08-18

Provide for Ministry-Related Expenses

•

Address these expenses with an Accountable Reimbursement Plan (ARP)

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Vehicle use for business purposes

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Meetings, workshops and conferences

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Books, periodicals, software, etc.

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Continuing education opportunities

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Provisions for ministry-related hospitality

B08-20

Provide for Ministry-Related Expenses

• • • • •

Requirements for an ARP Expenses must have a business purpose Document amount, date, place and purpose Expenses substantiated within 60 days Excess advances returned within 120 days

B08-21

Provide for Ministry-Related Expenses

• •

IRS-approved standard rate for transportation (mileage rate), meals and lodging Unused ARP money should not be given as a bonus or additional income; tax issues

B08-22

Provide for Ministry-Related Expenses

•

Create an ARP in three easy steps 1. Determine covered expenses and create a plan 2. Require expense reports to be submitted within 60 days of incurring expenses 3. Reimburse approved expenses at least once a month

B08-23

Provide Employee Benefits

•

A strong benefit plan

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Has tax advantages

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Offers insurance coverage benefits

•

Protects church

•

Provides appropriate coverage for staff

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Includes retirement contributions

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The Importance of Insurance

•

Insurance coverage can include:

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Term life

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Employee accident

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Medical

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Disability

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Dental

B08-26

Help Them with Retirement

•

A retirement plan

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Paid service ends, income needs do not

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Employer contributions

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Employee contributions

B08-27

Help Them with Retirement

•

A GuideStone retirement plan features:

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Tax-sheltered contributions

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Designed exclusively for ministries

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No SECA taxes for eligible ministers

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Housing allowance benefit

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Roth contributions (not available in all plans)

B08-28

Help Them with Retirement

• •

The Church Retirement Plan for SBC churches

•

Potential benefits

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Disability income

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Survivor protection Mission Church Assistance Fund (MCAF)

B08-29

Budgeting That Works!

Getting it Right!

By

PresenterMedia.com

Over the Next Three Thursdays… Aug. 16th Preparing to Budget Aug. 23rd Comprehensive Budgeting Aug. 30th Creating Buy in and Participation

What Questions do you have for me?

Rod Wiltrout Church Finance Specialist 559 287-7840 cell 559 256-0858 direct line [email protected]