How does a church compensate its pastor and staff in ways that are beneficial to the employee and to the church? The obvious answers should never be overlooked – salary, health insurance, and retirement contributions. Of course, we all forget sometimes that a cost of living increase is not a real raise – it only keeps the salary with the same buying power as the previous year. We also tend to forget that health insurance increases its premiums almost every year. And for retirement contributions to be effective at the time of retirement, they must keep pace with salary increases. But I am sure that you know that and are keeping up on an annual basis.

So if those are the obvious answers, what are the neglected areas that churches do overlook in regards to their employees? I believe that there are three major areas that need attention today by personnel committees in most churches.

• Amount of Vacation Time – Churches are notorious for giving pastors and staff two weeks of vacation the first year and never changing it regardless of how long the employee has served. I believe that the roles of ministers are often some of the highest stress jobs around. Time off and time away is needed to help relieve the stress and give the minister time to refocus with God, himself, and his family. Churches might do well by their staff to give 3 weeks after 5 years of employment and 4 weeks after 10 years of employment. They could also consider giving these amounts of vacation based on a minister’s total time in ministry. Thus, a pastor called to a new church after having served another church or even two churches for a total of 10 years might begin with 4 weeks vacation. Vacation time is one of the least expensive, but most beneficial benefits that a church can give its employees.
  
  
• Disability Insurance – Churches usually realize that everyone gets sick. They see health insurance as a real need for their employees. But churches don’t foresee that an employee can become disabled through an illness or an accident. When that employee can no longer perform their duties, what is the church to do? One of the least expensive forms of insurance a church can purchase is long term disability insurance for its employees. By providing this coverage, when the unthinkable happens, the church has provided a means to continue funding the employee even after they are no longer able to work. It is a blessing to the employee and to the church.
  
  
  
  

• Life Insurance - Churches can provide up to $50,000.00 of term life insurance for each employee. Again, no one wants to think about this insurance being needed for one of their employees but it does happen. Term life is inexpensive compared to other life insurance and is the one specified by the IRS that can be provided without a tax cost to the employee.

I want to encourage pastors, staff members, and church members to make sure that those individuals or the group responsible for employee compensation and benefits receive a copy of this article. If you don’t feel it is appropriate to give it to the right people yourself, contact me with their information and I will pass it on. One must become proactive rather than reactive regarding these issues. By planning and preparing ahead, the church is able to offer these three low cost benefits that provide a great help to employees.