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Salary Equity Social Sec Benefits Reimburse Employee Interim Supply SalaryComp Jobs Prayer
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For 2008, a MINIMUM guideline for salary, including housing-related allowances, is shown below. This is intended to make it easier for congregations to understand the basic compensation of their pastor(s) and/or associate(s) in ministry. If your congregation provides a parsonage, the minimum guideline should be divided by 1.3 to account for the value of the parsonage. If the congregation is already at or above the minimum salary guidelines, a cost of living increase of at least 2.9% should be considered (The CPI-W for Northern California was 2.9% in 2006), since the failure to provide a cost of living salary increase is, in effect, a salary cut. In additon, merit increases should be considered for all rostered leaders. Congregations that are below the minimum guidelines should intentionally plan to reach guidelines within a set period of time. For example, if the congregation is 10% below guidelines, the congregation might make the commitment to increase the pastor's or AiM's salary by 6% - 8% per year for three years to reach the minimum guidelines three years hence. Once the basic salary package has been set, the congregation council, upon consultation with the pastor, should set the amount of the basic salary that is to be designated as housing allowance for tax purposes. The form below is for congregation council use in designating the housing allowance. This procedure must be done annually, prior to the payment of the housing allowance. Most councils will make this designation at their December council meetings, but any time frame is appropriate as long as it is prior to the payment of the housing allowance. Since the cost of housing varies so greatly throughout the synod, no attempt has been made to recommend the dollar amount of a pastor's housing allowance. In general, a housing allowance should be designated as high as possible, keeping in mind that the amount that can be excluded from taxable income cannot exceed the lowest of the following: 1) the allowance itself. 2) the amount actually used "to provide a home" or 3) the fair rental value of the furnished home, plus utilities. Any amount spent by the pastor in excess of the allowance is not excludable; any allowance not used by the pastor becomes taxable income and must be reported as "other income" on Form 1040. |
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HOUSING ALLOWANCE RESOLUTION In order to permit (Name of Pastor) to benefit from the provisions of Section 107 of the Internal Revenue Code, the council specifies that the total compensation paid to her/him during the fiscal year ended (Subsequent Year) includes a housing allowance. (Name of Pastor) estimates that s/he will spend $____________ during the year for housing expenses. Since such approval by the council would permit her/him to deduct that amount from her/his taxable income and has no further effect upon our congregation or budget, it was RESOLVED,
___________________________ __________________ __________
(The above resolution should be included in the minutes of the congregation council prior to January 1 of each year. A copy should be made, signed and titled by the president or secretary of the congregation, and given to the pastor(s) for his/her records.) NOTE: The above resolution may be downloaded as a Microsoft Word document by clicking here. |
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