What Percentage of Budget is Average for Salaries

by Bob
(houston)

What is the average % of salaries in a church budget?

Answer

It kind of depends...

Dan Busby, CPA, states that employees of churches may receive reasonable compensation for their efforts. Excessive compensation can result in private inurnment and may jeopardize the tax-exempt status of the church.

Reasonable compensation is based on what would ordinarily be paid for like services by a like organization under similar circumstances. Taken from Zondervan 2010 Church and Nonprofit Tax and Financial Guide.

So a new church may see a big percentage of its income go for the pastor’s salary, but a more established church may pay their pastor the same amount and it be a lot smaller percentage.

However, most "experts" say no more than 50 percent should go for the pastor's salary in the typical church. In a small church it may go up to 55 or 60 percent, and in a large church it should be closer to 40 percent.

Hope this helps.



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