Clergy Compensation Bookletmacucc.s3.amazonaws.com/ACC81F8A5C244A2794853F9E0D31EA… · FAITH...

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Commission for Leadership DevelopmentCommission for Leadership DevelopmentCommission for Leadership DevelopmentCommission for Leadership DevelopmentCommission for Leadership DevelopmentMassachusetts Conference, United Church of ChristMassachusetts Conference, United Church of ChristMassachusetts Conference, United Church of ChristMassachusetts Conference, United Church of ChristMassachusetts Conference, United Church of Christ

20002000200020002000

Copyright 2000 by the Commission for Leadership DevelopmentMassachusetts ConferenceUnited Church of Christ

All or part of this document may be photocopied if the phrase �Used by permission of the Commis-sion for Leadership Development, Massachusetts Conference, United Church of Christ� is included.

The third edition of this booklet is based on earlier editions produced by Rev. Donald Whitcomb andthe staff of the First Church in Paxton and subsequently revised in a second edition by Rev. ThomasBoates with the assistance of Mrs. Barbara Boates. In this current edition we have been helped ontax related matters by Ms. Carol Darnley, a member of First Church of Monson. The Commissionexpresses its gratitude for the contribution of each of these people to our common life and ministryin the Massachusetts Conference of the United Church of Christ.

One printed copy of this booklet is available free to each Massachusetts Conference church; otherparties please include $5 for printing and postage with your order. This document is also availableon the Conference Web site at www.macucc.org.

TABLE OF CONTENTSINTRODUCTION ............................................................................................................................ 2FAITH FOUNDATIONS FOR COMPENSATION ................................................................ 2COMPENSATION ......................................................................................................................... 3

Salary ............................................................................................................................................... 3Housing ............................................................................................................................................ 3

Church-Provided Parsonage ....................................................................................................... 3Housing Allowance ..................................................................................................................... 3

Equity Allowance .............................................................................................................................. 4BENEFITS ....................................................................................................................................... 5

Annuity ............................................................................................................................................. 5Health Insurance ............................................................................................................................... 5Disability Income and Term Life Insurance Plan ................................................................................. 5Group Life Insurance ........................................................................................................................ 5Physical Examinations ....................................................................................................................... 5Medicare .......................................................................................................................................... 5Social Security .................................................................................................................................. 5Worker�s Compensation ................................................................................................................... 6Malpractice Insurance ....................................................................................................................... 6

VACATIONS AND LEAVES OF ABSENCE .......................................................................... 7Vacations .......................................................................................................................................... 7Days Off .......................................................................................................................................... 7Continuing Education ........................................................................................................................ 7Sabbatical Leave .............................................................................................................................. 7Parental Leave .................................................................................................................................. 7Adoption .......................................................................................................................................... 7Personal/Compassionate Leave ......................................................................................................... 7Sick Leave ....................................................................................................................................... 7Death ............................................................................................................................................... 8

PROFESSIONAL EXPENSES .................................................................................................. 9Travel ............................................................................................................................................... 9Ecclesiastical Meetings ...................................................................................................................... 9Other Business Expenses .................................................................................................................. 9

ADDITIONAL TERMS OF EMPLOYMENT ....................................................................... 10Child Care Costs ............................................................................................................................ 10Job Description .............................................................................................................................. 10Evaluation ....................................................................................................................................... 10

ASSOCIATE PASTORS ............................................................................................................ 11INTERIM PASTORS .................................................................................................................. 11PART TIME CLERGY ............................................................................................................... 11APPENDIX A: SAMPLE CONTRACT (TERMS OF CALL) ......................................... 12APPENDIX B: SAMPLE JOB DESCRIPTION (COVENANT) ...................................... 15APPENDIX C: PRESENTING A PASTORAL COMPENSATION

PACKAGE IN AN ANNUAL REPORT ............................................................................ 18APPENDIX D: USEFUL PHONE NUMBERS/ADDRESSES/RESOURCES ...... 19

2 CLERGY COMPENSATION BOOKLET, MASSACHUSETTS CONFERENCE, UNITED CHURCH OF CHRIST

INTRODUCTIONThe work of the church of Jesus Christ is a holy and wholesome vocation.The cooperative ministry of laity and clergy is greatly enhanced by respon-sible and sensitive compensation policies for all who serve in the local church.This booklet, prepared by the Commission for Leadership Development,focuses on ordained pastors and associate pastors, both settled and interim.

Each local church in the Massachusetts Conference sets personnel policiesand salary levels. Usually, the pastor�s compensation package is based on abudget developed by the appropriate church board.

The Commission for Leadership Development recommends that each churchhave an active Pastoral Relations Committee to facilitate communicationbetween pastor and congregation. The functions and makeup of such a com-mittee is well described in a booklet published by the UCC Office for ChurchLife and Leadership, �The Pastoral Relations Committee� (OCLL-E25) and is available from UCC Re-sources, 1-800-325-7061.

Personnel policies and salary levels should be reviewed annually. The Commission further recommends thatthe local church have a public policy of being an equal opportunity employer.

FAITH FOUNDATIONS FORCOMPENSATION1. Covenant Relationship: We are a church based in covenant. When a church calls a pastor, it

covenants to compensate fairly, and the Pastor covenants to serve faithfully. The annual consideration ofremuneration is a �covenant renewal� and should be entered into from this perspective

2. Stewardship: We are accountable for the use of resources of the church, both human and material. Alocal church should be concerned over the responsible raising of receipts along with the responsible use ofits funds. Accordingly, there must be a stewardship of love and support for the clergy and other churchworkers. Once the pastors and other church workers realize that there is an undergirding of stewardshipfor them and their families, they are set free to love and serve.

3. Spiritual Obligations: The Apostle Paul often quoted Scripture in relation to salary considerations(cf. I Cor. 9:9-14; I Tim. 5:17-18; Rom. 4: 1-4; Gal. 6:6.) There is a scriptural mandate, and therefore, aspiritual obligation to provide a just and fair salary to all who labor in the local church. The compensationshould be sufficient to ensure that all church workers are spared the extraordinary stress of living on aninadequate salary.

4. Christian Love and Candor: The connection between pastor and people is a sacred trust. Anopen, caring, healthy relationship is important for the well-being of the local church. The Commissionrecommends that annual salary negotiations be carried out with candor, clarity and a loving, supportive ofmutual respect. Christian love further requires that individuals should be be fairly compensated regardlessof age, gender, race, sexual orientation, marital status. or family status.

CLERGY COMPENSATION BOOKLET, MASSACHUSETTS CONFERENCE, UNITED CHURCH OF CHRIST 3

COMPENSATION1. Salary: The current minimum cash salary, updated by each MACUCC

Annual Meeting, is printed at the end of this booklet. This MACUCCsalary update sheet includes a grid, so as to help churches determine afair cash salary, allowing for years of experience and size of church.

2. Housing: A second, major portion of a pastor�s compensation is hous-ing, which is provided either in the form of the rent-free use of a church-owned house or a housing allowance.

A. Church-provided house (Parsonage): When the use ofa parsonage is provided, the house should be on a par with theaverage housing in the community; it should be attractive, conve-niently arranged and well-maintained. The church customarily paysfor all parsonage utilities (heat, light, water, refuse service, local phonecalls, etc.) Pastors who live in parsonages have the benefit of being able to tax exempt their householdcosts through a budgeted parsonage allowance. The church�s official board should vote annually,before the ensuing year begins, what part of the pastor�s salary is to be treated as a parsonage allow-ance, and include this figure in the official records. An annual parsonage allowance (not to exceed areasonable amount) could save the pastor in income tax. Any unused allowance is always taxableincome. Any over-expenditure of the allowance is never deductible.

B. Housing Allowance: Home ownership is still considered advantageous by many clergy becauseit allows a pastor to build equity in real property and to gain annual appreciation. This equity is thenavailable for the pastor to use as collatoral for an education loan or as payment toward retirementhousing. Also, home ownership insures that a pastor�s spouse and family will have a home and acommunity in the event of a pastor�s untimely death.

Many Churches have found that with the capital realized from the sale of an existing parsonage, theycan loan their pastor funds for a down-payment on a home, or that with the help of the income from therental of an existing parsonage, they can provide their pastor with a housing allowance.

When a church loans money to the pastor to help finance a home, there are several payback options tobe considered:

• a second mortgage with monthly payments of principal and interest,• a second mortgage with monthly payments of interest only, the principal to be paid when the

pastoral relationship is concluded,• a shared equity arrangement in which the appreciated value of the home is divided at the time

of sale between the pastor and the parish, proportional to their respective investments in theproperty, at which time the church�s principal investment is also repaid.

If a housing allowance is provided, several factors must be taken into consideration, both bypastor and congregation:

••••• Revenue rulings issued by the I.R.S. state that the maximum amount of housing which clergymay receive and exclude is the fair rental value of the home, furnished, plus the cost of utilities.Then to the extent that such an allowance is spent, it is excluded from taxable income.

• Such an allowance is for all expenses, as well as utilities and amortization, and, depending


upon local circumstances will range from $10,000 to $35,000 annually.• For the actual amount of the housing allowance to qualify by IRS standards as tax-free in-

come, it must be clearly designated by church vote as housing allowance and be formallyapproved annually by the appropriate church board prior to the beginning of payments. Thisapproval must be recorded in official minutes and retained in the church files. Also, a pastormust keep records such that she or he can show that the actual housing costs do in fact equalthe entire housing allowance. Any amount of the allowance that is not actually spent on housingis taxable to the pastor.

• It must be kept in mind that a housing allowance is fully taxable for social security tax pur-poses.

• A housing allowance can be spent on any items required to provide a home, such as themonthly mortgage payment (interest and principle), taxes, insurance, furniture, furnishings,repairs to the house or furniture, new appliances, yard care, mowing, snow removal, all utili-ties, even the cost of pots, pans, silverware, and household cleaning materials. The only statedexceptions are food and maid service.

3. Equity Allowance: An equity allowance is not a housing allowance. The two different types ofallowances should not be confused. For a pastor living in a parsonage, an equity allowance is part of basiccompensation, and is only fair and just.

In fairness, there is a need to enable parsonage dwellers to accumulate some equity that can eventually beused to provide housing, either owned or rented. After a lifetime spent in parsonages, the family may haveno assets with which to provide housing. In other words, at death, disability, or retirement, the pastor�sfamily is on its own.

The mechanics for funding an equity allowance should be as simple as possible. A written statementoutlining a plan, the funding, and specific procedure is crucial. (We strongly suggest that this be done inconsultation with a qualified tax attorney or certified financial planner to assure that the plan conforms withthe requirements of the IRS.)

How much? Some congregations figure out how much the parsonage has increased in value during the pastyear, and pay that annually to the Pastor. (A 2% increase in value on a $125,000 parsonage would be a$2,500 equity allowance payment.) Other churches estimate the typical payments on mortgage principal,and pay that. Still others pay a percentage of salary, say 7.5% as an equity allowance.

The important consideration is that the pastor be allowed what most parishioners have: a build-up ofequity.

It must be remembered that an equity allowance is additional compensation (deferred income), and even-tually will be taxable. Of course, the tax, also, may be deferred. Generally, a separate fund is set aside andis not available to the pastor until retirement. It becomes taxable when it is used or when the pastor hasaccess to the funds whether or not it is used at that time. If a pastor moves, it will be desirable to agreefurther that the depository of such set-aside funds will be changed upon the pastor�s relocation, but that thefund and the restrictions on its use be continued.


BENEFITS1. Annuity: Quarterly contributions to the Annuity fund are a part of

the standard benefit package for UCC clergy. The annuity paymentsare made by the local church directly to the UCC Pension Boards. TheAnnuity Fund is an IRS 403(b) tax-sheltered annuity, which means pay-ments to the fund are not taxable until the benefits are received afterretirement. Local churches pay an amount equal to 14% of the cashsalary plus housing allowance. If a parsonage is provided, the annuityfund payment is 14% of 130% of the salary. This is the standard formularecommended by the UCC Pension Boards for calculating the annualchurch contribution to a pastor�s annuity. However, in some specificsituations where a pastor�s compensation package is heavily weightedtoward a housing allowance, a tax accountant should be consulted toassure that the annuity payment does not exceed the maximum percentof taxable compensation allowed by the IRS for contribution to a 403(b) tax sheltered annuity. A percent-age higher than 14% may be agreed upon by the church, the pastor, and the Pension Boards withinI.R.S.limits.

2. Health Insurance: Health Insurance rates are determined yearly and are based upon the best con-tract the Pension boards are able to obtain. The Commission recommends that the pastor participate in thedenomination�s health insurance plan, and that the church pay the full cost of health insurance premiums.Participation in the denomination�s health insurance program is a tangible expression of our covenant to bein a relationship of mutual care and support with our colleagues, lay and ordained, who are employed bylocal churches and other ministries within the United Church of Christ. In addition, having the denomination�shealth insurance plan assures that coverage will continue to be available throughout a pastor�s ministry inthe United Church of Christ, and increases her or his security.

3. Disability Income and Term Life Insurance Plan: This Plan of the United Church ofChrist provides disability income insurance equal to a portion of the base salary. It provides declining termlife insurance which is also based on the salary. Because this plan does not take effect for 90 days followingdisability, churches should be prepared to pay the pastor�s full compensation during this waiting periodeither by purchasing short term disability insurance elsewhere, or by covering these costs out of churchfunds. The Disability Income and Term Life Insurance Plan costs 1% of the salary basis (cash salary plushousing.)

4. Group Life Insurance: Coverage in addition to that provided by the above Disability Income andTerm Life Insurance Plan is available through the Pension Boards for a $50 annual premium. This coveragedecreases gradually from $40,000 under age 35 to $3,500 at age 65.

5. Physical Examinations: The Commission urges churches to guard the health of their pastors bypaying the cost of periodic physical examinations. After the age of 40, their examinations should be doneon an annual basis.

6. Medicare: The Commission recommends that when a pastor reaches the age of 65 and becomeseligible for Medicare, her or his church pick up the cost of The Medicare Supplement Plan.

7. Social Security: Clergy are treated as self-employed for social security purposes. Pastors must paythe current 15.3% (Schedule SE) on the cash salary plus housing allowance or fair market rental value of


the parsonage. Because this is not matched by any employer contribution, the Commission urges churchesto pay 7.65% of the pastor�s salary plus housing allowance (or 7.65% of 130% of base salary if parsonageis provided) for social security, as it must do for regular FICA employees. The difference is that this is paiddirectly to the Pastor and listed as a Social Security Allowance or Offset. This is taxable income whichmust be included with taxable wages on the W-2 form given to the pastor and reported on a clergyperson�stax returns. IRS regulations constantly change; pastors should apprise themselves of the most recent IRSregulations.

8. Worker�s Compensation: Churches are required by law to provide worker�s compensation insur-ance coverage to all employees, including clergy.

9. Malpractice Insurance: Each church should consider purchasing malpractice insurance. (Thisinsurance is included in the Conferences of the UCC Insurance Program.)


VACATIONS ANDLEAVES OF ABSENCE1. Vacations: It is recommended that pastors be given at least one

month paid vacation each year, with complete freedom from all parishresponsibility during that time.

2. Days Off: The Commission urges churches to grant, and pastors totake, one and one-half days off each week. (The MACUCC Compen-sation update sheet accompanying this booklet and revised each year,has additional specific recommendations.)

3. Continuing Education: The Commission urges churches to granttheir pastors two weeks study leave, including weekends, each year.We also urge an allowance for continuing education which would covercosts of books and professional journals, of between $600 and $1,000 a year. Pastors should share theresults of any study leaves with their pastoral relations committee. Time used for continuing educationshould never be equated with vacation time.

4. Sabbatical Leave: Sabbatical leave is an important part of a pastor�s development. The sabbaticalconcept is rooted in Scripture, and is a set time for study, travel, or personal renewal for the pastor.Sabbaticals are most often granted every five to seven years, and are normally three months, exclusive ofvacations. Many churches offer their pastors three months at full pay, or six months at half-pay. Churchesare cautioned to appropriately plan for a sabbatical every 5-7 years, by �earmarking� part of the expenseto be set aside each year, in their annual budget. The largest cost will be pastoral coverage. Your AreaConference Minister can be helpful in providing more information and possible names of those who couldappropriately provide pastoral coverage at the time. It would be hard to overstate the value of a sabbati-cal, both to pastor and to congregation. A pastor can easily become tired or �stale� in what is one of themost demanding professions in modern society, in terms of time and emotional involvement. A congrega-tion helps itself, as well as it�s pastor, by seeing that she or he has time for enrichment and renewal.

5. Parental Leave: Provisions should be made at the birth of a child for a female pastor to be granted 2-3 months maternity leave at full salary and benefits. A male pastor should be allowed at least 2 weekspaternity leave at full salary and benefits. Both should be allowed a certain flexibility for up to 6 months,during this important time of family adjustment and change.

6. Adoption: We recognize that adoption has an impact on the family similar to that of a birth. Eachadoption has unique characteristics. A pastor should be allowed at least 2 weeks leave at full salary andbenefits at the time of an adoption and should be allowed a certain flexibility in scheduling during thisimportant time of family adjustment.

7. Personal/Compassionate Leave: Allowance must be made for the pastor to be with his or herimmediate family at times of special celebration such as weddings or graduations and at times of personalemergency or unusual family responsibility. Paid personal leaves would normally be limited to a period of5-7 days per year, except where compassion dictates further extension.

8. Sick Leave: The Commission recommends that churches give their pastor(s) sick leave accumulated atthe rate of one day per month up to thirty days. In cases of prolonged illness or disability churches should


continue to provide clergy compensation and all benefits for ninety days, after which the Disability IncomePlan takes effect. Parsonage use or housing allowance should be continued for the three month period,and thereafter be negotiated month-by-month.

9. Death: In cases of clergy death churches should provide salary, housing and all benefits to the spouseand/or family for three months. Continued use of the parsonage and other expenses, such as moving,should be considered on an individual basis in consultation with the Conference Area Minister.


PROFESSIONALEXPENSESThe Commission on Leadership Development urges churches to adopt an�Accountable Reimbursement Policy� (acceptable to the IRS) as a meansfor repaying ministers for professional expenses incurred on behalf of thecongregation. For further information and a sample policy see our Hand-book for Church Treasurers and Trustees. Funds for the reimbursementof professional expenses should be established as line items in the churchbudget each year.

1. Travel: reimbursement for travel should be at the allowable rate bythe IRS. It is necessary that the minister provide to the church a dailyrecord of trips taken, briefly noting the purpose of such trips, the dis-tance traveled and the expenses incurred, including tolls and parking fees. Expense vouchers should besubmitted regularly on a weekly or a monthly basis.

Alternatively the church may provide the pastor with an automobile for which the church pays all expensesand for which the pastor would then record and compensate the church for all personal miles traveled.

2. Ecclesiastical Meetings: The church should pay for its pastor(s) to attend the meetings, confer-ences and assemblies of the association, conference and wider church. In addition, pastor�s expenseswhile participating in ecumenical activities on the local or state level should be reimbursed. Attendance atsuch functions, or work within the wider church such as camps, conferences or committee work should notbe considered vacation or days off.

3. Other Business Expenses: The costs of subscriptions to professional journals, entertaining guestsof the church, cleaning or procuring of vestments to be worn in worship, professional dues and the ex-penses of in service training are all legitimate professional expenses. These costs should be reimbursed bythe church upon receipt of appropriate documentation.


ADDITIONAL TERMS OFEMPLOYMENT1. Child Care Costs: Business and industry are increasingly helping

their employees with child-care costs. Each church and pastor shouldnegotiate a reasonable level of financial support for this expense, in thelocal area, based on the prevailing policies of other institutions, such ashospitals, colleges, and schools, as well as business and industry.

2. Working Conditions: The church should expect to providecompentent support staff as well as suitable office space and appropri-ate office equipment to facilitate the pastor�s work. In arranging officespace consideration should be given to the pastor�s need for study, coun-seling and administration. It is also important that the church do all it canto see that the pastor�s office is easily accessibly to people with disabilities or physical challenges.

3. Job Description: It is to the mutual advantage of both pastor and congregation to have both a writtenposition description (covenant) and a written contract (terms of call). This will not only clarify mutualexpectations, but also become a major component of the annual review and evaluation which the Commis-sion recommends.

4. Evaluation: Documents for evaluation are available through your Conference Area Minister. Pleasekeep in mind that in the Massachusetts Conference the evaluation of ministry is a mutual process involvingthe work of both pastor and congregation.


ASSOCIATE PASTORSThe Conference�s annually published �Compensation Guidelines forMACUCC Clergy� apply to any pastor engaged in full-time ministry, includ-ing associates, Guidelines in this booklet also apply to associate pastors.

Associate pastors should receive from 65% to 90% of the Senior Pastor�ssalary, depending on position descriptions, scope of responsibility, length ofservice, experience and years in the ministry; with the expectation that, after5 years in the position, the salary should be at least 75% of the cash salary ofthe senior pastor.

INTERIM PASTORSCompensation and benefits for interim pastors should be comparable to those of settled pastors. The guide-lines in this booklet should generally be followed by a church and the interim pastor candidate in negotiating theterms of call.

PART TIME CLERGYPart time Pastors should be compensated as indicated in this booklet and the guidelines voted each year by theConference Annual Meeting, pro-rated according to the percentage of the time for which they are employedby the church.

If you have questions not covered by this booklet, you may contact your Conference Area Minister.


APPENDIX A: SAMPLE CONTRACT(TERMS OF CALL)The Commission for Leadership Development offers the following sample only as a general guideline. Themanual used by local church pastoral search committees also contains samples of calls. The pastor and con-gregation should develop a call/covenant/contract which is mutually agreeable and beneficial. It might be ad-vantageous to all concerned to add a sentence referring to the Clergy Compensation Booklet for additionalprovisions not necessary at the time of a specific agreement, but which might arise later.

Contract (Terms of Call)(on local church letterhead; 4 copies)

To the Reverend ____________________________________________.

At the election for Pastor held in ____________________________ Church of __________________ onthe________day of ____________A.D. 20____., you were duly elected to that office. The people of ourcongregation voted to enter into a covenant with you to become Pastor and Teacher of this church, effective_______________________.

The duties which will be required of you are those set forth in the Word of God, in the Constitution of theUnited Church of Christ, (and in a position description to be negotiated with you within three months of youracceptance of the pastoral office) and affirmed in the vows you took at your Service of Ordination.

To support and encourage you in the discharge of your important and responsible office, we promise you, inthe name of the congregation, all proper attention, love, and respect in Christ�s name.

In consideration of your service, and so that you may be relieved of temporal cares as far as possible, we dohereby obligate ourselves to support and encourage you in the following ways:

Compensation

1. The church agrees to pay an amount of $__________ as cash salary, payable semi-monthly or monthly,by the church Treasurer.

2. The church agrees to provide you:

a. a parsonage (house) with all utilities provided and a furnishings allowance of $______ per annum,vouchered by mutual agreement between you and the Board (of Trustees), and

an equity allowance of $______ (or ____% of salary) per annum, upon mutual agreement betweenyou and the Board (of Trustees) as to the method of payment/deposit of those funds. OR

b. a housing (or rental) allowance of $______ per annum (or month).

Benefits

1. The church agrees to pay (to the Pension Boards), quarterly, an annuity equal to 14% of either:

a) a Parsonage is provided: BaseSalary $__________30% of Base Salary $__________Total: $__________14% of Total = $__________ payable.


b) A housing allowance is given: Base Salary $__________Housing Allowance $__________Total: $__________14% of Total: $________ payable.

2. The church agrees to pay the full annual premium for the Minister�s Group Health Insurance Program ofthe United Church of Christ, including dental coverage, currently $__________ per annum.

3. The church agrees to pay for the Disability Income and Term Life Insurance Plan of the United Church ofChrist, based of 1% of the compensation basis (salary plus housing).

4. The church agrees to pay the cost of periodic physical examinations for you, on a basis negotiated yearlybetween you and the Board (of Trustees).

5. The church agrees to pay you an additional allowance equal to one-half (1/2) the cost of Social Securitycoverage, per annum.

Vacations, Study, Leaves Of Absence

1. We agree to provide one month�s vacation from all parish responsibilities.

2. We agree that you shall have a minimum of one and a half days off per week, and wherever possible, tofollow any guidelines recommended by the Conference, pertaining to a pastor�s work schedule.

3. We agree to grant you up to two weeks� study leave per year for continuing education, in consultation withthe Pastoral Relations Committee or Diaconate.

4. We covenant that you shall have a sabbatical, at your request, and in consultation with the (PastoralRelations Committee or Diaconate) every 5-7 years, for a period of 3-4 months at full-pay, or 6 months athalf-pay. It is understood that you will remain as pastor for a full year following any sabbatical, or negotia-tion shall be made for a partial repayment by you to the congregation, in consultation with the (PastoralRelations Committee, Diaconate, or Trustees).

5. In the event of the birth or adoption of a child, we agree to negotiate appropriate leave and/or flexibility ofschedule with you, pursuant to the guidelines found in the Conference�s Clergy Compensation Booklet.

6. We agree that you shall have (5-7) days per annum of personal leave, and we agree to be sensitive to thosetimes when compassion dictates a further extension.

7. We agree that you shall have sick leave, accumulated at the rate of one day per month, up to thirty days. Inthe event of prolonged illness, disability, or death, we further agree to provide you (or, in the case of death,your spouse and/or family) salary, use of the parsonage (or housing allowance), and all benefits but travelfor 3 months, when the Disability Income Plan coverage ensues.

Professional Expenses

1. We agree to provide you with auto expenses of $______ per mile upon proper submission of an expensevoucher (or the use of a church-owned, leased, or rented car).

2. We expect that you will attend the meetings, conferences, and assemblies of the wider-church, both denomina-tional and ecumenical, and we agree to provide for those expenses up to a sum of $______ per annum.

3. We agree to provide you with an expense allowance of up to $______ per year, to be paid to you uponconsultation with the Treasurer of the church.

4. We agree to pay your moving expenses, up to the sum of $__________.


Additional Terms Of Employment

1. Upon your request, we agree to make provision for up to $______ per annum for child-care costs.

2. We agree to provide you with an easily accessible office, and to be sensitive to your needs for adequatesupport staff, appropriate surroundings and equipment.

3. We agree that you shall have a job description (covenant) which is mutually satisfactory and mutuallybeneficial, and which will clarify mutual expectations.

4. We covenant with you that there shall be provisions made for (annual) review/evaluation of our mutualperformance as pastor and congregation. We further covenant for an annual review of this call/covenant,including an annual review of all compensation and benefits.

5. It is understood that this call agreement/covenant between pastor and congregation can be terminated byeither party giving at least ninety (90) days� written notice, or upon other terms of mutual agreement. Ifeither the church or the pastor feels that there is any unfairness in the termination, the aggrieved party hasthe right to refer the matter for a hearing to the association committee on the ministry.

6. It is understood that the Conference Area Minister and the association committee on the ministry shall beconsulted at the request of either the pastor or the congregation, should the relationship between the pastorand the congregation become strained or in jeopardy.

In witness thereof, we have subscribed our names, on this _____ day of __________ 20_____ A.D.

For the congregation calling:

Moderator: (Signature) ____________________________

Date _________________

Clerk: (Signature) ____________________________

Date _________________

Treasurer: (Signature) _____________________________

Date _________________

Pastor-Elect�s Acceptance:

Signature _______________________________

Date _________________

(Note: Affix church seal here, if available)

____________________________

Four copies; one each to the following:Pastor-ElectAssociation Church and Ministry CommitteeAssociate Conference MinisterLocal Church(es)


APPENDIX B: SAMPLE JOBDESCRIPTION (COVENANT)(This could also be used as a position description with minimum rewording. Again, keep in mind that in theMassachusetts Conference, allowance should be made of mutual expectations and evaluation, pastor andcongregation.)

�Pastor and Teacher�

Our Pastor is responsible, in co-operation with the Church Council (or other appropriate body) for the totalpolicy and program of the work of Christ within this congregation of the United Church of Christ.

Our Congregation is responsible to give you all proper attention, respect, love and support in your Pastoral/Teaching ministry on behalf of Christ Jesus within this congregation.

In order that mutual expectations might be clarified and evaluation possible, fair, just and mutual, these Princi-pal duties are envisioned:

1. Our Pastor shall oversee the worship and work of the congregation. He/she shall provide direction andevaluation for all aspects of the church�s ministry.

We (the congregation) shall support his/her oversight by our worship attendance, and by ourwillingness to receive guidance, and example from our Pastor.

2. Our Pastor shall celebrate all the Rites and Sacraments appropriate to a United Church of Christincluding, but not limited to: Baptism, Holy Communion, Confirmation, ordination and installation oflay persons, marriage, and burial. He/she shall also provide adequate training and counseling to all whoare touched by the Rites and Sacraments of the Church.

We shall support and encourage his/her sacramental leadership among us, and receive, in aspirit of mutual need, his/her counseling and training relating to the Rites and Sacraments ofthe Church.

3. Our Pastor shall plan and conduct services of worship each Sunday while on duty, and at such othertimes as may be appropriate. He/she shall be expected to research, preach, and teach God�s Word.

We shall be a congregation committed to being teach-able and reach-able in Worship, and toreceiving, in all honor, our Pastor�s sharing relating to God�s Word.

4. Our Pastor shall visit and give comfort to the hospitalized, sick and shut-in members of our congrega-tion, on an appropriate and continuing basis. He/she shall also seek out, and provide adequate instruc-tion to those with sincere desire to unite with our congregation.

We, as a congregation, shall provide our Pastor with the assistance of Deacons and otherswho may, at his/her request, engage in this ministry.

5. Our Pastor shall act as the primary Counselor of those within the congregation who need guidance andassistance.

We shall see that he/she has adequate time for such duties and we commit that he/she shallnot be expected to bear a counselling load beyond responsible expectations, or the limits ofhis/her skills.


6. Our Pastor, as Teacher, shall be accountable for a strong program of Christian Education (in conjunc-tion with the Director of Christian Education and/or Religious Education Committee), oversee thepreparation of those preparing to be Confirmed, and provide leadership and/or encouragement for anactive youth program.

We shall assist him/her with the recruitment and training of responsible Christian EducationCommittee members and Church School teachers. We also shall work with him/her to secureadequate lay or professional assistance needed to carry out an active youth program.

7. Our Pastor shall direct the on-going administrative matters of the congregation, and supervise allchurch staff. He/she shall have the right and duty to make recommendations to the Board of Trustees(or appropriate committee) regarding the employment , termination, and salary reviews of all churchstaff.

We shall provide our Pastor with adequate support staff for the size and program of thecongregation. We commit to receive his/her oversight, evaluation, and input in all matters ofadministration, operation and personnel.

8. Our Pastor shall ensure that church records are properly maintained, including records of membership,birth, marriage, baptism, confirmation, communion, and death. He/she shall ensure that all office func-tions are effectively handled.

We shall provide our Pastor with appropriate office space, equipment, and staff. We shallprovide him/her with lay/professional assistance in the handling of all records and papers.

9. Our Pastor shall take part in appropriate community activities, and ensure that our congregation takesits responsibility to engage in missions work beyond the local church. We expect our Pastor to beecumenical in his/her outlook, and contribute to the needs of the community as he/she feels is appropri-ate, as a representative of our congregation.

We shall support our Pastor�s involvement in the community, and ecumenical church andallow adequate and appropriate time for these activities and involvements.

10. Our Pastor shall be expected to represent the congregation at, and where appropriate serve on,Association, Conference, and denominational boards, committees, and related activities.

We shall support and encourage our Pastor�s participation in the wider work and witness ofthe United Church of Christ, and provide lay delegates and workers for same, at his/herdirection and/or suggestion. We agree that work for the United Church of Christ beyond ourcongregation shall not be counted as vacation time, study leave, or day(s) off.

11. Our Pastor shall act as an ex-officio member of all organizations, committees, and functions of thecongregation. He/she shall endeavor to assure that all members of such groups thoroughly understandtheir purpose, objectives, and reason for being. He/she shall attend activities, meetings, and othergatherings as appropriate, and where time permits.

We shall not expect that our Pastor can do everything. We shall endeavor on our part not toplace undue demands on his/her time relating to these organizations, committees, and func-tions. We shall not expect our Pastor consistently to be out more than three evenings in anyone week, or that he/she become so involved that the needs of his/her family are neglected.


12. Our Pastor shall endeavor to assure sound communications between her/him self and the congrega-tion, and two-way communication between the congregation and the wider church.

We commit ourselves to open, honest, and loving communications with and about our Pastor,and to the receipt of her/his leadership when it comes to matters relating our congregation tothe wider church.

13. Our Pastor shall have the full authority granted to him/her by the United Church of Christ, and by theConstitution and By-Laws of our congregation. He/she shall always have freedom of the pulpit, andthe right to be consulted in any matters decided by the congregation and any of its organizations,boards, officers and committees.

We shall respond appropriately at all times to his/her authority, and shall have the right ofconference with him/her at all times.

14. Our Pastor shall be expected to develop professionally through continued study, reading, conferencesand seminars. He/she shall share this knowledge where appropriate, and encourage our congregationto develop in their secular and spiritual growth.

We shall support and encourage our Pastor in these endeavors, and provide adequate timeand assistance, so that he/she can fully benefit from continual development.

15. Our Pastor shall be expected to perform those other duties which may be mutually assigned or devel-oped by Pastor and Congregation.

We shall assist our Pastor at all times in the discharge of his/her duties, and we accept thatour ministry is a mutual one, as Pastor and Congregation.

(Note: If used as the official covenant, it should be co-signed by the Pastor and at least 3 appropriate churchofficers, and copies should be kept by all parties, and one copy should be forwarded to your Area Office.)


APPENDIX C: PRESENTING APASTORAL COMPENSATION PACKAGEIN AN ANNUAL REPORTGiven the fact that church members inevitably make comparisons between their own earnings and those oftheir pastor, thought needs to be given to the way this information is presented in the church�s Annual Reports/Budget.

The Commission urges local churches to provide a complete breakdown of the cost of the pastor�s position asfollows:

Compensation (Salary...Housing/Equity)Benefits (Annuity, insurances,Social Security, etc)Study/Sabbatical/Other LeavesProfessional Expenses (Travel, Meeting/Business)Additional Costs (Child care, Allowances)

In this way congregations have complete information about their Pastor�s total package.


APPENDIX D: USEFULPHONE NUMBERS/ADDRESSES/RESOURCES1. Massachusetts Conference United Church of Christ

Framingham Conference Center Phone: 508-875-5233One Badger Road, P. O. Box 2246 Fax: 508-875-5485Framingham, MA 01703-2246 Email: [email protected]

WEBPAGE: http://www.macucc.org

Area OfficesCentral Area Phone: 508-853-3346485 Grove Street Fax: 508-853-3450Worcester, MA 01605 Email: [email protected] Boston Area Phone: 617-742-445014 Beacon St. Fax: 617-742-8470Boston, MA 02108 Email: [email protected] Area Phone: 978-373-674812 Phoenix Row Fax: 978-373-6749Haverhill, MA 01832 Email: [email protected] Area Phone: 508-746-8330225 Water St. #115 Fax: 508-746-8339Plymouth, MA 02360 Email: [email protected] Area Phone: 413-589-7034P.O. Box 443 Fax: 413-589-7035 or 413-589-7099Ludlow, MA 01056 Email: [email protected]

2. Phone numbers:Commission for Leadership Development

Contact through the Framingham Conference Center: 508-875-5233Pension Boards, UCC: 212-870-2777 or 800-642-6543Federal Income Tax Information: 800-829-4477State Income Tax Information: 800-392-6089Social Security Information: Call your district office, listed in the White pages

http://www.macucc.org/


3. Additional Resources• Hammar, Richard R., Church and Clergy Tax Guide (Updated Annually) Christian Ministries Publi-

cations, Greensboro, NC• Worth, B.J., Income Tax Guide for Ministers and Religious Workers, World Publishing, Iowa

Falls, Iowa.• Holk, Manfred, Handbook of Personal Finance for Ministers, Church Management, Inc. Austin,

TX.• Internal Revenue Service, Publication 517, �Social Security for Clergy and Religious Workers�• Parish Life and Leadership in Local Church Ministries, UCC:

Clergy EvaluationThe Pastoral Relations Committee

• Darnley, Carol �Clergy Taxes and Compensation.� (available from MACUCC, Commission for Stew-ardship)

Sabbatical Leave

• Alban Institute, Sabbatical Planning• Massachusettes Conference, UCC, A Handbook For Church Treasurers and Trustees

Commission Publications Available on the MACUCC Web Site: http://www.macucc.orgCompensation Guidelines for MACUCC ClergyClergy Compensation BookletMusic Ministries Compensation BookletCompensation Guidelines for Church Sextons and CustodiansChurch Office Personnel Compensation BookletEducational Ministries Compensation BookletOur Church�s Annual ReviewHandbook for Church Treasurers and Trustees

http://www.macucc.org/

2001 Compensation Guidelines for MACUCC Clergyfor use with Clergy Compensation Booklet

available from the Commission on Leadership Development, MACUCC

The 201st Annual Meeting of the Massachusetts Conference of the United Church of Christ, concernedwith the growth of its churches and the compensation of its ordained leaders, recommends that allcongregations meet the goals as outlined in Guidelines for Clergy Compensation. The guidelines apply toall full-time pastors, associates and assistants, both settled and interim.

Because the pastor of a church is required by the Associations of the Massachusetts Conference, UnitedChurch of Christ to be a highly educated and trained professional, the salary and housing package forpastors should be congruent with the compensation of other similarly trained professionals in thecommunity. The total compensation package could be considered at least equal to that of the local highschool principal, showing consideration for years of service, special skills and training, and naturalaptitude. The federal tax structure is unique for clergy, and the compensation package should be designedin such a way as to maximize the pastor's income.

The work schedules and compensation packages of local pastors should be healthy for the pastor and for thechurch. That would require a balance of time spent in the church’s ministry and time spent with family andfriends -- a balance of work and recreation, a balance of exercising the body and the mind, a balance of careof others and care for self.

Some churches, because of their smaller membership and/or financial constraints, may be unable toprovide an adequate compensation package for full time pastoral service. They are encouraged to meetwith the Area Minister and/or Stewardship and Financial Planning Consultants from the Conference toreview their situation. They may consider creative options, such as calling a part-time, bi-vocationalpastor or sharing a pastor with another congregation in the area in order to combine resources to offeradequate compensation. A congregation should not expect a pastor to work full time for part-timecompensation.

Be it resolved that the 201st annual meeting recommends:

1. Churches pay a minimum entry-level cash salary according to the following table for a full-time pastor;

2. Churches provide either:

a. a PARSONAGE with a furnishings allowance, all utilities, and an equity development planwhich will ensure the pastor has housing assets in retirement; or

b. a CASH PACKAGE sufficient to allow the minister to buy, furnish and maintain a median-priced house in the church's community; the minimum cash package shall be no less than 1/100per month of the value of a median-priced home in the community; ( for example: if a median-priced house in a community is $150,000, the church's minimum cash package for housingwould be $1,500 per month, or $18,000 per annum)

3. Full benefits and professional expenses be provided, as listed below; benefits and professionalexpenses are not to be considered part of the cash salary, but are part of the cost of having anordained minister;

4. Churches already at or above the minimum and also fully providing all benefits and professionalexpenses as outlined in below give at least a cost of living increase and consider a merit increasealso;

http://www.macucc.org/lclresrc.htm#comp

http://www.macucc.org/resources/clergy_comp.pdf

5. The work schedule of local pastors be a maximum average of 40-50 hours per week with no morethan 3 evenings in a given week; in addition, pastors take at least 1½ days off per week.

CASH SALARY RANGESThe cash salary ranges do NOT include housing, benefits, professional or any other expenses. Incalculating years of ordained experience, churches may wish to include other relevant life and workexperience.

Number of Church Years of Ordained ExperienceMembers 0 -3 4 - 10 over 10

0 - 150 $24,000 - $36,000 $26,000 - $39,000 $28,000 - $42,000150 - 300 $24,000 - $38,000 $27,500 - $41,250 $30,000 - $45,000300 - 500 $24,000 - $40,000 $30,000 - $45,000 $35,000 - $52,000

500 - 1,000 $24,000 - $42,000 $33,000 - $49,500 $40,000 - $60,000over 1,000 $24,000 - $44,000 $36,000 - $54,000 $45,000 - $67,500

BENEFITS AND PROFESSIONAL EXPENSES

A. SOCIAL SECURITY ALLOWANCESince clergy are treated as self-employed for social security purposes, pastors must pay the current15.3% on the cash salary plus housing allowance or on cash salary plus the fair market rental valueof the parsonage plus utilities. Therefore it is recommended that churches pay 7.65% of the pastor'ssalary plus housing allowance or, where a parsonage is provided, 7.65% of fair market rental valueplus cost of utilities for social security. This is taxable income which must be reported on a clergyperson’s tax returns.

B. BENEFITS1. annuity - minimum of 14% of base salary plus housing allowance (or minimum of 14% of

130% of base salary if parsonage is provided) paid quarterly to the UCC Pension Board 12. life insurance and disability benefit plan - disability income insurance and decreasing term

life insurance through UCC program; cost is 1% of base salary plus housing allowance or,where a parsonage is provided, of 130% of base salary

3. group life insurance - additional decreasing term life insurance available through the PensionBoards for $50 per year

4. medical/dental insurance - available through the UCC Pension Boards5. holiday and vacation time - usual holidays ( or compensation time) and 4 weeks vacation per

year6. continuing education time7. sabbatical time and funds8. sick time - up to 30 days per year9. maternity/paternity leave, including for adoptionFor more detail, see Clergy Compensation Booklet

C. PROFESSIONAL COSTSTax law allows deduction of business expenses on Schedule A only after the minister has spent morethan 2% of family adjusted gross income on such expenses. THEREFORE it is important that achurch establish an “Accountable Reimbursement Plan” which will reimburse or pay directly allcosts which the pastor incurs for "doing business" for the church, so that the pastor is not payingincome tax for church expenses. These should include but not be limited to:1. auto reimbursement - for use of personal car at current IRS rate plus tolls and parking, or an

automobile provided by the church2. professional expenses - all expenses allowed by the IRS3. continuing education allowance

For more detail see Clergy Compensation Booklet

For reference, the following is an illustration of what is needed to fund the POSITION of a pastor (salary,housing, AND benefits and professional expenses) for a minister with 12 years experience, receiving amid-range salary, serving in a church with 150-300 members:

COMPENSATION:salary $37,500housing allowance (for those not in a parsonage, $150,000 house) 18,000

BENEFITS:annuity (salary + housing x 14%) 1 7,770life insurance and disability benefit plan (salary + housing x 1%) 555group life insurance 50medical/dental insurance (family plan) 8,544social security offset (salary + housing x 7.65%)2 4,246

PROFESSIONAL COSTSprofessional expenses 1,500continuing education 720auto reimbursement (12,000 miles/year @ $.31/mile) 3,720

total needed to fund the position of minister $82,605

It is understood that some churches may not be able to meet these guidelines immediately, and may needinstead to institute them over a period of 3-5 years. It will be important in these instances to project a costof living increase for each year and to make the necessary projection of total dollars above where thecompensation package is at present. Then simply divide by the number of years it will take to reach thegoal, and increase by that figure the annual compensation package over the 3-5 year period. 1 This is the standard formula recommended by the UCC Pension Boards for calculating the annual churchcontribution to a pastor’s annuity. However, in some specific situations where a pastor’s compensation package isheavily weighted toward a housing allowance, a tax accountant should be consulted to assure that the annuitypayment does not exceed the maximum percent of taxable compensation allowed by the IRS for contribution to a403(b) tax sheltered annuity.

2.This is taxable income which must be included with taxable wages on the W-2 form given to the pastor andreported on a clergyperson’s tax returns.

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