How to Go on Salary at the Church or Ministry!

By Raul Rivera

Why Receive a Salary?

In my 20 years of ministry experience, I have come to the conclusion that churches and ministries that have pastors and leaders on full time salary are much more effective in their outreach than pastors who are working full time jobs in other places.  The dilemma we run into when our pastors are working outside jobs is that their hearts are divided, and the amount of energy and time they can give is limited.  Does this mean that only those pastors who can devote "full time" can be on salary at the church? Of course not!  Every church has its humble beginnings, and sometimes the Lord uses these meager times to test our hearts.

My Personal Experience

In November of 1993, my Father and I started a church in South Florida.  A year and a half into the start of this new church, my father was called to Venezuela to establish a children's orphanage.  When he left, I was made Senior Pastor. Our church had approximately 80 members, and all tithes and offerings went to pay church bills.  By day I worked a full time job with the county school board and on nights and weekends I worked as pastor.  This was a difficult schedule not only for me, but for my family as well.  My heart was with the church, but I also knew that my family needed a provider.  Naturally, working a job that paid the bills was necessary, but through it all my heart longed for the day when the Lord would grow our church to the point where it could afford a salary.  Through that process I learned three things that I want to share with you.

1. Setting the example is imperative:  As pastor, in order for the pastor to start receiving a salary at the church, you must set the example in giving.  Often times as pastor, I was one of the biggest givers in the church.  Why?  I knew that as their leader, I had to set an example that others would follow.  My recommendation is that you consider giving 15 percent more than normal to the church, then take that 15 percent as a part time salary.  This is a good way to encourage the church to prioritize your full time status.  This also results in positive tax benefits.  In addition to your contribution to the church being tax deductible, you can choose to apply for self employment tax exemption and the church board can designate a housing allowance for you. If you do these things your part time salary can be 100 percent tax free!  
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2. Do Not Fear Man:  Planning and preparation are key to success in any situation.  Many pastors never plan for part time or full time ministry because they fear men.  Though they would like to dedicate full time to the church, they fear man and are afraid to set the pastor's salary as an important agenda for the congregation.  Why?  They believe that the congregation may not see it as an occupation worthy of full time pay!  Because of that, they do not humbly take the time to teach the church that it is a worthy occupation.  This is more common among Latino churches (one of which I pastored) and is often a hindrance to growth.  Today is the day for you to start teaching the church and the board that it is Biblical for the pastor to receive a salary for the work he or she does at the church.
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3. Faith is based on obedience and not wishful thinking:  It takes a leap of faith to quit your day job for full time ministry at your church, and the decision can prove difficult to make.  Often times, pastors confuse wishful thinking for faith.  Leaving your job too soon can be costly for your family and for the church.  Though you plan for it and set the example, put the transition off for as long as you can.  You're probably asking yourself "wait, isn't this contradictory to what was said in points one and two?"  In fact it is not.  Since faith is based on obedience, the day will come when you know in your heart of hearts that if you do not make the decision to go full time, you will be walking in disobedience.  In 1994, The Lord spoke to me in prayer saying that in June of 1996, I was to resign from my job at the school board and go full time at the church.  My heart was glad when the Lord spoke this to me because I thought it meant that within two years our church would be running 400 members, and that going full time at the church would be a cake walk.  To my surprise, from the very day the Lord spoke to me, the church began to lose members. My idea of going full time became a lost memory, and I began to lose hope. 

2 Years Later!

Fast forward to April of 1996.  The Lord began to remind me of His instruction for me to go full time at my church, and honestly, I did not want to hear it.  Our church had diminished to about 25 members and paying the bills was a miracle every month.  I could not see any way that I could ever be on any salary at the church.  Nevertheless, the Lord would not relent.  He invited me to trust Him even though I could not possibly see the outcome of this adventure.  Not being able to withstand, I gave in and said yes to his will and left my job at the school board.  Though the church was in its worst financial season, I decided that going full time was God's will and took the plunge.  No sooner had I made the decision to leave behind my old job, that the Lord began to provide for me and my family.  Miracle after miracle, we saw His mighty hand of provision.  Our church grew over 400 percent within the next 6 to 9 months.  

The IRS and the Pastor's Salary!

Correctly setting the pastor's salary is very important.  Current Tax law provides for severe penalties (excise tax ) for improper reporting of the pastor's salary.  Under section 4958, as defined in treasury regulation 53, even a reasonable salary that is not properly documented will still be fined by the IRS for up to 200 percent of the salary.  Below are four steps to properly setting up the pastor's salary, regardless of how big or small it may be.

1. Create a salary contract.
2. Discuss it at a board meeting and have it approved.  The pastor is not allowed to vote on his/her own salary. 
3. Sign the salary contract.
4. Designate a housing allowance and apply for self-employment tax exemption.

Let us show you how at one of our conferences.

We take time at every conference to show you how to properly set up the pastors salary.  Please go to www.startchurch.com/conferences.