Day 12: How Much to Pay Each Person on Your Team (Part 1)
By: Brian Howard
How much should a person on your team be paid? Here are a few guidelines for making this decision.
The Four-Times Rule
One starting place for a fair salary is to calculate the average monthly mortgage/rent in your area and multiply it by four. Dave Ramsey argues that a mortgage payment should not exceed 25% of take-home pay. With this standard in mind, if housing costs are $2200 per month, family income should be $8,800 per month. (This number does not include benefits.) Because many families do not live on one income alone, this does not necessarily mean that churches must pay one person the entire amount. But few quality church leaders will accept a $50,000 annual salary (in US contexts) when housing will cost them $2,800 per month. They will pursue better opportunities than you are offering. The four-times rule is not where the conversation should finish but is the right starting point for fair compensation.
In building a dream team compensation strategy, consider comparable salaries in your community. For example, consider compensating a children’s director similarly to a well-compensated elementary school teacher. Both are likely to have bachelor’s degrees and require similar skill sets. Remember that an elementary school teacher often has excellent benefits and substantial time off during the summer.
The third consideration in compensation is what a local context allows. Local context considerations are related to comparable salary considerations but widen the conversation. Helpful questions may include: What is the economy of the city? What is the median household income? What is the demographic of the church? What do salaries look like in your city?
The answers to these questions will be different in Tucson than in Los Angeles.
These three compensation considerations are a great starting place, but we’re taking this compensation discussion to another level with tomorrow’s post. We’ll see you then!
And remember, We started Context Staffing to help you find the right leader. We specialize in finding leaders for churches. Our team spends hundreds of hours searching, recruiting, and vetting potential leaders for your church so that you can confidently build your dream team.