The Hidden Costs of Underpaying Church Staff

Talking about and setting church salaries can feel like walking through a minefield. There are so many factors at play. Because a person’s salary is more than just a number, it has a direct and significant impact on their quality of life. 

However, churches must operate within budgets. As much as they would like to pay every staff member the maximum amount, real-world limitations often make that impossible.

So when church leaders sit down to plan the annual budget, the staff salaries line item often feels especially heavy. 

And unfortunately, when costs need to be reduced, staff salaries are likely the first to be slashed. 

But here’s the problem: the attempt to save money by underpaying staff costs a church far more than it realizes. 

Why Churches Underpay Staff 

Before we can discuss solutions, it’s important to understand why churches often underpay their staff in the first place.

Tight Budgets and Uncertain Giving

Most churches aren’t sitting on piles of excess cash. Giving tends to fluctuate from year to year and season to season. This puts churches in a tough place. Do you cut missions? Benevolence? Youth ministry? They’re all incredibly important. 

Unfortunately, when offerings fluctuate, salary increases are often the first things to be postponed. It feels safer (and more spiritual) to freeze pay than to cut programs or mission support.

The Calling Mindset

Many pastors and ministry staff feel called by God to be in ministry. With that call comes the need to serve sacrificially, as Jesus did. But sometimes churches lean too heavily on calling, thinking it justifies underpaying leaders and staff. 

To be fair, there may be times when church leaders need to be underpaid for a season, such as during the launch of a church plant or in the midst of a financial crisis. But that shouldn’t be the norm. Calling doesn’t pay a pastor’s bills. 

Lack of Salary Benchmarking Data

Many churches simply don’t know what’s fair. After all, paying a pastor is not the same as paying a bank manager. Pastors don’t contribute to a quantifiable bottom line, from which salaries can be calculated.

Without clear comparisons, a reasonable salary often becomes whatever fits into this year’s budget. 

Cultural Expectations Around Frugality

In some church cultures, modesty and thrift are seen as spiritual virtues. You know what I’m talking about. Church members love how the pastor has driven the same rust-bucket truck for the past decade, even though it has no heat, no seatbelts, and technically might not be street legal. 

Stewardship matters. A lot. But don’t confuse frugality with faithfulness. Paying generously doesn’t have to mean extravagance.

The Hidden Costs You Don’t See on a Balance Sheet

So here’s the thing. Cutting salaries may allow you to balance your budget. However, it creates all kinds of costs that don’t appear on the balance sheet. 

High Turnover and Ministry Disruption

Oftentimes, when staff members feel underpaid or undervalued, they eventually leave. And when they do, churches lose far more than a paycheck. They lose many months of ministry momentum. This, in turn, can lead to disrupted programs, strained relationships, and further complications.

“Cutting salaries may balance a budget, but it quietly creates burnout, turnover, and stalled ministry growth.”

Burnout and Decreased Ministry Effectiveness

Ministry is demanding work. It’s not uncommon for pastors and staff to often put in long hours, well beyond the typical 40-hour work week. They work nights, weekends, and holidays preparing for services, caring for people, and making sure everything runs smoothly.

Serving in ministry can also have significant emotional demands. In a given week, a pastor might joyfully officiate a wedding, preach a sermon, minister to a chronically ill church member, counsel a struggling couple, and lead a memorial service. 

Each of these things requires an emotional investment, and the end result is that church leaders are emotionally drained, 

When staff members constantly feel stretched thin and financially anxious, burnout becomes inevitable. Creativity wanes, spiritual vitality dims, and compassion fatigue sets in.

As the Church Salary Guide reminds us: “Pastoring is an emotionally and spiritually taxing endeavor. You don’t want your pastor worried about feeding his family while also trying to shepherd the congregation.”

Loss of Institutional Knowledge

When long-time staff leave, churches lose years of experience, wisdom, history, and relationships. Every transition forces the church to rebuild trust with members and volunteers. New processes must be learned. New responsibilities need to be shouldered. 

All of these things can force a church into a waiting period, where it can’t really move forward until a person is fully settled into a role. 

Decline in Excellence and Innovation

Underpaid staff often operate in a state of survival mode. They must focus on immediate needs rather than creative solutions or long-term ministry growth. Things get slapped together at the last minute, and inexperienced people are forced to step into positions they’re not qualified for. 

The result is often stagnation. Programs feel stale and tired. Communication lags and outreach fades. Events that were once heavily attended turn into ghost towns. 

Negative Effects on Church Culture 

If staff feel undervalued and stretched, that mindset trickles down. Volunteers sense discouragement, and ministries lose energy. An environment of scarcity is created, causing people to withdraw and conserve energy and resources. It’s hard to serve joyfully in this kind of environment. 

On the other hand, when staff are cared for, they naturally pour that care back into their ministries. They have the energy and resources they need to serve the church with gladness and excellence. 

What Does the Bible Say About Paying Church Staff?

Obviously, the Bible doesn’t specify how much church leaders and staff should be paid. Every church has its own unique circumstances and needs. 

However, the Bible does provide us with some general principles regarding compensation for those who serve in ministry.

“The Laborer Is Worthy of His Wages”

Scripture says, “The laborer is worthy of his wages” (1 Timothy 5:18) and “Do not muzzle an ox while it is treading out the grain” (Deuteronomy 25:4). 

Paul applied those verses directly to ministers of the gospel, saying, “The elders who direct the affairs of the church well are worthy of double honor, especially those whose work is preaching and teaching.”

The work done by pastors, leaders, and church staff matters. A lot. They labor on behalf of church members and the community, seeking to point people to God in every situation.  

Balancing Stewardship and Generosity

Churches don’t need to pay extravagantly. Pastors shouldn’t be rolling up on Sundays in Ferraris. But they also shouldn’t be chugging up in a 1985 Honda Civic that belches blue smoke and must be hotwired to start.  

Churches should pay generously and thoughtfully, striking a balance between stewardship and compassion. 

As the Tithely Church Staff Salary Guide puts it, “Offering fair compensation helps you attract quality talent, retain high-performing staff members, and set an example of how we should treat each other as brothers and sisters in Christ.”

What Fair Compensation Really Looks Like

Fair pay is more than a number on a paycheck. It’s about the total compensation package and the church’s long-term investment in its people.

Looking Beyond Base Salary

Salary is critical, but churches need to think holistically about compensation. A full package may include:

• Paid vacation and sabbaticals
• Health, dental, and vision insurance
• Life and disability insurance
• Retirement plan access and contributions
• Housing allowance (for pastors)
• Maternity/paternity leave
• Professional development and tuition reimbursement

When discussing church salaries with pastors and church staff, make sure to include the entire package. Many church employees don’t realize the full value of what’s being offered unless it’s clearly outlined.

Factoring in Role, Experience, and Location

Have you ever been to New York City? Everything is ridiculously expensive. A salad that costs $8.99 elsewhere might run you $17.99. If you plan on getting a latte every day before work, you’ll need to take out a second mortgage. 

The point is that the cost of living varies greatly depending on where a person lives. Church salaries need to reflect this. 

Other factors also need to be considered, like church size, education, experience, and scope of responsibility. An executive pastor in San Francisco will definitely need more than a youth pastor in Peoria, Illinois.

Why Churches Must Use Benchmarking Data

When setting church salaries, you can’t afford to guess. You need to have an idea of approximately how much each position should pay, based on national and regional data.  

The Salary Guide recommends pairing its data with other trusted resources like ChurchSalary.com and the Leadership Network Compensation Tables. Investing time in research helps you budget accurately and prevents guesswork.

The Benefits of Paying Church Staff Fairly

Paying generously is the right thing to do, biblically speaking. It’s also the wise thing to do. 

Long-Term Staff Retention

When staff know they’re valued and cared for, they stay. They don’t spend energy worrying about bills or searching for other jobs. That stability builds trust, continuity, and deeper discipleship relationships.

Long-term staff relationships also help members feel more secure. When the same person shows up again and again, people become comfortable with them and develop confidence in their abilities.

Healthier, More Effective Ministry Teams

Financial stress drags pastors and church staff down. They’re preoccupied with paying the bills. They feel physically anxious. It’s difficult to get things done. 

On the other hand, when staff aren’t financially stressed, they’re way more focused and present. They can pour energy into ministry instead of survival.

A Culture of Generosity and Trust

Generosity is contagious. When a church models generosity toward its own staff, it shapes how the entire congregation views giving and stewardship.

Paying fairly sends a message: This is how we treat people in God’s kingdom, with honor, care, and trust in His provision.

Greater Long-Term Ministry Impact

There’s a direct correlation between church salaries and effective ministry. 

When you invest in people, it multiplies their impact in ministry. If you’re constantly needing to replace church staff, it’s really difficult to gain any traction in ministry.

However, when pastors and staff can stay long-term, ministries can build upon past work and continue to grow.

Practical Steps Toward Fair Pay

Hopefully, by now you can see why it’s so essential to pay your church pastors and staff generously. 

But how do you make that happen? 

Here are some practical steps. 

Benchmark and Review Salaries Annually

Use resources like the Tithely Church Salary Guide as your baseline, and compare it to similar churches in your region. Set up a yearly salary review process that includes cost-of-living adjustments and other potential increases.

Use Financial Tools to Plan Ahead

Tithely’s suite of digital giving and management tools can help you forecast giving trends and then make wise staffing decisions. Instead of relying on gut feelings or instinct, use hard data to plan for raises and growth in a way that’s both faithful and financially smart.

Connect Compensation to Ministry Effectiveness

When discussing church salaries with leaders, financial teams, or members, make sure you draw a connection between a person’s compensation and their ministry effectiveness. 

Help people understand that placing a significant financial strain on an individual severely limits their ability to serve effectively.

Honoring the People Who Build the Church

Every Sunday and throughout the week, your staff dedicate their time and energy to making ministry happen. They prepare sermons, organize volunteers, plan worship, clean buildings, stockpile goldfish crackers, and lead people closer to Jesus.

Underpaying them both hurts their families and weakens the church’s witness. The hidden costs emerge gradually: burnout, turnover, stagnation, and discouragement.

But when you choose generosity, you discover rewards that no spreadsheet can measure.

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