What Percentage of Budget is Average for Salaries
What is the average % of salaries in a church budget?
There is no "easy" answer!
Dan Busby, CPA, states in his "Church and Nonprofit Tax and Financial Guide" 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.
So a new church may see a big percentage of its income go for the staff salaries, but a more established church may pay their staff the same amount and it be a lot smaller percentage.
However, most "experts" say no more than 50 percent should go for salaries in a typical church. In a small start up church it may go as high as 90 percent, but in a large church it should be closer to 40 percent.Know the answer? Face the same situation? Please post your answer or comment by using the "comment" link below. Thank you!