Church Law and Tax looked at five key aspects of the compensation-setting process—and the significant differences in how churches handle them compared with employers in the for-profit sector.
Building compensation packages for church pastors and staff is a process markedly different than setting salary and benefits in the for-profit world. Accountants and attorneys serving nonprofits know this, but the realization of the differences can be jarring to newcomers to a church setting.
"Clergy compensation is an animal in and of itself," said Ben Rhodes, a CPA who serves as chief financial officer and business administrator for Faith Assembly of Orlando, Florida. "When we have new board members come on, many of them have never even heard of a housing allowance exclusion. When I begin to explain how we compensate our clergy, their eyes begin to glass over."
Board members ...