Healthy Budget Percentages For Thriving Churches

Because they don’t work with the staff on a daily how to create a church budget basis, there’s no way for them to appropriately judge the performance and capacity that should influence compensation decisions. Ideally, there should be some system in place for the board to set the senior pastor’s salary. And then the senior pastor should have authority to make the final decision for compensation levels of everyone on his or her team. We’ve seen churches that have gone as high as 65 to 70 percent. Churches that don’t have facility expenses, including rent or mortgage payments, may be able to get away with investing a higher percentage of their budget on staffing.

Understanding Church Budgets

Here’s a simple plan any pastor can use to add a month’s worth of sermon planning every year, without taking a month off to do it. If you are thinking of moving to a different area, you may desire to consider using this Cost of Living Calculator. In any structured organization, the higher you are on the totem pole, the higher the salary, which is quite understandable.

How Much Do Pastors Really Make?

Open communication, clear financial reporting, and active engagement of the congregation create an environment where everyone feels valued, informed, and confident in the church’s financial management. Once the budget is established, regularly monitor and review financial statements to ensure adherence to the budget and make adjustments as necessary. Periodically assess income and expenses, seeking opportunities to increase income sources and optimize spending. Engage with church leaders, finance committees, and staff to maintain financial transparency and accountability. Identify and categorize the various expenses the church incurs.

Train your team

The pastor is the lead person when it comes to raising money in the church so I don’t think you ever escape that responsibility. A fourth reason to establish a church budget is that it shares the burden. It’s quite possible that your key leaders don’t have a personal budget, which every leader should have.

Do you want to raise more money for your mission?

If you have no plan, everyone’s flying by the seat of their pants and it just feels like you’re playing catch-up all the time.
This may include tithes, offerings, donations, rental income, fundraisers, grants, or any other revenue streams.
Using 46% to 60% of the church’s budget on total compensation is a “normal” range for most churches.
Likewise, property expenses also fuel individual programs, as Kessler noteswith children’s ministry.
Many church metrics reflect both the best practice and the reality of what it takes to staff and administer a healthy church.

A stewardship team of four or five people can set the church up for a healthy, vision-centered budget process. The work of ministry is a high calling, but let’s be real, the finances matter. If you are looking into a career in the clergy, we’re here to help you understand pastor salary by church size. By following these steps and tips, a church can create a healthy budget that supports its mission, ensures financial stability, and Food Truck Accounting enables effective stewardship of resources. A budget is not set in stone; it’s a flexible tool that should evolve with the church’s financial and operational landscape.

While this is only one way to assess your financial health, it’s critical and telling because compensation is typically the largest collective line item in church budgets. These decisions carry a lot of weight for the future of your church’s financial health, the expectations and morale of your staff, and retention amongst your team. Analyze industry standards for similar roles in organizations within the size and scope of your church to better understand how your compensation plan compares to others. Establishing specific, measurable financial goals is fundamental for adequate church budgets.

Plug ‘n Play Discussion Questions to Lead Your Team into Growth Mode.

When churches do that, I find they tend to hire higher capacity leaders who are able to raise up other leaders and build volunteer teams. In fact, some of the largest churches I’ve served in a consulting capacity have had the fewest staff compared to overall attendance. Remember, there’s no biblical mandate establishing how many staff members your church should employ. But, there is Scriptural direction to compensate church leaders well. With that in mind, I always recommend that churches hire fewer people and pay those people well.

This allows the pastor to do the preaching and shepherding of the campus church while much of the administration and programs are handled by the large church.
Instead of a finance committee, establish a stewardship team to manage the budget process.
For staff compensation, the accepted range typically falls between 33% to 50%.
It’s important to ensure fair compensation for your staff while also being mindful of financial constraints.
But, there is Scriptural direction to compensate church leaders well.
As I said, try to keep total compensation and payroll at your church below 50% of the church’s income.

Average Pastor Salary for Mid-Sized Church

The process of creating a budget for your church helps you to clarify your ministry’s purpose. Small churches increasingly utilize online giving platforms to simplify the donation process for congregants and to improve online bookkeeping stewardship of tithes, offerings, and the admin’s time. Looking for a more in-depth understanding of compensation factors to consider when setting church salaries. This is a question every church must consider for two reasons. You are responsible for the tithes and offerings given to your organization, often from individuals or families who make deep financial sacrifices.