Eastern New York/New England District
The Wesleyan Church
Salary, Fringe Benefits, and Reimbursements
Information Worksheet
GOAL: The Eastern New York/New England District desires that each pastor receives a fair salary, benefit, and reimbursement package from their local church (I Timothy 5:18). The responsibilities of a pastor are many, utilizing all aspects of spiritual leadership and church management. The goal of each local board of administration will be to see that the pastor is compensated near the level consistent with other professionals in their local community.
Lay leaders serving on the local board of administration will accept that their most valuable employee (often only employee) is their pastor. It is to the church’s benefit to adequately compensate the pastor so that he/she is not preoccupied with the financial survival of their family.
STRATEGY: The local board of administration is to review at least annually the salary, benefits, and reimbursements of the pastor. Each church is requested to divide what the pastor receives into the three major categories listed below. This will allow easy comparison to local salaries. It is helpful to delineate between items that are for the financial benefit of the pastor (salary and fringe benefits) and those that are for the benefit of the church and its ministries (reimbursements).
1. BASIC SALARY - This area has two parts (in compliance with the current tax laws.)
A. Salary - this is the cash salary a pastor receives.
B. Cash Housing allowance or parsonage provided-This should be stated as a separate amount due to current income tax laws. The rental value of the parsonage, including utilities or a housing allowance, is added to the salary to determine the basic salary of a pastor. Please note that the rental value of the parsonage or the housing allowance is subject to self-employment tax.
2. FRINGE BENEFITS - These are items given to the pastor to provide a degree of care for the pastor and her/his family. These items are not considered a part of the salary.
A. Health insurance- If available, group health insurance premiums are not taxable income. Non-group premiums paid directly or reimbursed are taxable income and subject to self-employment taxes beginning in 2014. According to District Stranding Rules, the church should pay the total health insurance premium for the pastor and family. There are discrimination rules that should be considered when the church has more than one employee.To not care for this matter is to run the risk of the pastor incurring cripplingly high expenses should a major illness or accident occur.
B. Self-employment taxes – Commissioned, ordained and licensed ministers are to be considered self-employed for social security purposes. The district requests that each church reimburse the pastor in full for the amount of self-employment taxes. Currently, the social security tax is 12.4% of the basic salary, plus a 2.9% Medicare tax on the salary. The amount reimbursed is considered taxable income and the reimbursement is also subject to the self-employment tax.
C. Pension - The Wesleyan Church requires that every pastor be covered through the denominational pension plan, which is assessed at 12% of the basic salary package (cash salary, plus housing allowance, or fair rental value plus utilities of a furnished parsonage, plus bonuses and Social Security Tax reimbursement).
D. Group life insurance - Participants in the Wesleyan Pension Fund automatically receive group term life insurance coverage based on their annual salary, as determined by employer contributions, in multiples according to age. The church may purchase additional life insurance coverage with the pastor’s spouse as beneficiary.
D. Vacation time and sick time–The church should allow the pastor to take a paid vacation according to the guidelines indicated in the District Standing Rules.
3. REIMBURSEMENTS - These are expenses incurred by the pastor on behalf of the church. Examples include use of the pastor’s personal car for church business, costs to host guests and visitors, and costs to attend continuing education training opportunities. These expenses are not income to the pastor but reimbursement. The pastor should provide receipts and explanations for these expenses and then be fully reimbursed through an accountable reimbursement plan.
A. Car mileage - Each church should reimburse the pastor at an agreed upon rate per mile when traveling is done for the church. This does notincludetrips from home to church.
B. Cellular phone –Cell phones that are used primarily for substantial business reasons such as emergency contact, constituent contact when out of the office, and for non-compensatory reasons (not for morale, goodwill, or as additional compensation) may be reimbursed (or paid directly) without tax affect or logging of calls for substantiation purposes.
C. Host/entertainment account - Each church should reimburse the pastor for expenses incurred in his ministry for ministerial meetings, meals with people associated with the ministry, and hosting persons in her/his home. It is acceptable to set a budget limit on the total reimbursement a pastor can receive for car mileage and host/entertainment expenses.
D. Conferences/seminars - Becausea church desires its pastor to remain current concerning various aspects of the ministry, it will send the pastor to seminar(s) and coverthe total costs. It is expected that each church will pay the total cost for a pastor and wife to attend the various district-sponsored events.
E. Computers/Books/magazines–Laptops and other computers that are used outside the church office more than 50 percent for church business may be reimbursed without affecting taxable compensation. As well, books, magazines and other ministries resources may be reimbursed as ministry expenses.
PASTORAL SALARY WORKSHEET
Pastor ______ Church______
Fiscal Year ______
1.BASIC SALARY
Salary$ ______
Housing Allowance$ ______
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TOTAL SALARY$ ______
2.FRINGE BENEFITS
Health Insurance$ ______
Self-employment taxes $ ______
Pension$ ______
Other ______$ ______
Other ______$ ______
Other ______$ ______
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TOTAL FRINGE BENEFITS$ ______
3.REIMBURSEMENTS
Car Mileage$ ______
Cell Phone$ ______
Host/entertainment$ ______
Conferences/seminars $ ______
Books/magazines$ ______
Other ______$ ______
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TOTAL REIMBURSEMENTS$ ______
______
(Pastor’s Signature) (Other Church Officer’s Signature)