These recommendations and reminders are provided in order to support you in having meaningful, fruitful conversations with any congregation you might consider serving. We want to help you maximize your chances of negotiating an offer that you feel good about, with terms that serve you well throughout your ministry.
I. Know the Cost of Living
Can you afford to live in or near the neighborhood of the congregation, or will you need to live further away? Pay attention to the general cost of living in the area. While you may be earning more at the new congregation, it’s possible that your increased income will be offset by higher housing or other costs. Our Geo Index Listing now shows cost of living information for congregational locations.
II. Understand the Congregation’s Budget
Take the time to review and ask questions about the congregation’s budget.
III. Compare Your Agreement to the Model
The Congregation is required to outline how their draft differs from the UUA/UUMA Model Agreement. Assuming they have provided you a copy, does it differ in any substantial ways from the UUA/UUMA recommendations? There may be good reason for a minister or a congregation to request terms that depart from the Model Agreement. However, such deviations can also cause problems if not well understood by both congregation and minister. Read the agreement carefully. Make sure you understand it and agree with it, and negotiate any changes. You will be especially glad to have done this if your ministry runs into trouble or ends involuntarily.
IV. Review Your Compensation Package
Thoroughly review and understand all of the elements of the compensation package you are offered. Each year, a few ministers accept a congregation’s offer only to discover upon arrival that it is insufficient. Compare your offer to UUA Salary Recommendations and Benefit Recommendations.
- Is the recommended salary + housing amount consistent with UUA Salary Recommendations?
- How does it compare with your previous employment experience, including pre-ministerial careers?
While you can hope for reasonable merit increases in subsequent years, your best opportunity to negotiate your salary is likely to be upon hire. Unfortunately, many ministers have found that annual salary adjustments don’t keep pace (or barely do) with cost of living increases and/or fail to advance them within the UUA recommended ranges.
Self-Employment Tax Offset (Payment in lieu of FICA)
Does the congregation provide a payment in lieu of FICA (self-employment tax offset)? You need to pay 15.3% of your salary + housing (and other taxable income) in self-employment taxes. We expect congregations to provide you with the 7.65% of salary + housing that they would remit as FICA for a non-ministerial employee. Please note that the payment in lieu of FICA is itself taxable income. (See Ministerial Compensation 101.)
Housing Allowance: Looking Ahead
The Housing Allowance is a significant benefit for most ministers. The federal tax benefit for non-parsonage housing faces legal challenges every few years. Many believe that it will eventually go away. If this were to happen, a ministers’ effective income would likely be reduced by 10-15%. (See Housing Allowance for Ministers.)
Often congregations, particularly those struggling financially, maximize the salary offer in order to attract the greatest number of applicants. But in doing so, insufficient funding is allocated for benefits (health, life, and disability insurance, together with retirement). A quick rule of thumb is that benefits tend to total about 40% of the offered salary + housing amount. (This varies, especially with respect to health insurance plan level and dependent coverage). For instance, if salary + housing is $70,000, then benefits are likely to total $21,000 to $28,000 for a total cost of $91,000 TO $98,000. The older you are, the higher the amount, since health insurance is more costly for older individuals (pre-Medicare, of course). If a congregation is offering $50,000 salary + housing, and only $12,000 in benefits, something is probably missing.
Don’t assume that the congregation participates in the UU Organizations Retirement Plan. Most do, but not all. Every participating congregation has an Employer Participation Agreement on file with the Office of Church Staff Finances. This agreement dictates the congregation’s employer contribution to the Retirement Plan for all of its its eligible employees. It is illegal for the congregation to offer you a higher percentage than other employees receive. The congregation cannot offer 10% to you and provide only 5% for other staff.
Our Retirement Plan is a qualified church plan. This is extremely important for ministers in retirement, as it means distributions from the Plan in retirement are tax-free to the extent that they are used for housing. (So, contributions go in tax-free and come out tax-free.) This is not the case for retirement funds in a non-qualified or non-church plan.
Does the congregation participate in the UUA’s comprehensive, values-based Health Plan? Some congregations pay for a Bronze Plan rather than a Gold Plan. In doing so, they save money, but you pay more. If you agree to a silver or bronze high-deductible plan, understand that although your premiums will be lower, you will have larger out-of-pocket expenses. Please understand that the Gold Plan is not a “gold-plated” plan, but a standard plan that typically will cover 80-90% of your overall expenses. On a bronze plan, you can expect that only 60-70% of your expenses will be covered.
- Check to be sure the drug(s) you and/or family members take are covered at an affordable price.
- How about therapy?
- Some congregations have moved their staff into the Affordable Care Act system, where they may experience very high deductibles, limited networks, and high premiums for those not subsidized. (Note: We support the ACA!)
- How much does the congregation pay toward the incremental cost of family coverage?
Be sure to sign up for our Health Plan within 30 days of employment.
Group Insurance Plans: Life, Long-Term Disability, and Dental
Which of our Group Insurance Plans does your congregation offer? We believe the most critical one is Long-Term Disability. LTD insurance protects both the individual and the congregation if something terrible happens to the beloved staff member. Your congregation should pick up the full expense (and impute the income on your W-2 to ensure that any benefit paid out is nontaxable).
You should also know that by participating in a group dental plan, you will pay less for procedures than someone who does not have insurance.
Please remember to sign-up within 60 days of employment for these plans.
Professional and Moving Expenses
Is the amount budgeted for professional expenses adequate for your needs? General Assembly, regional gatherings, and continuing education opportunities can be expensive – and remember to budget for the UUMA Institute.
Important Note: If in the past you have paid for some professional expenses yourself and written them off on your taxes, you should know that the 2017 Tax Cuts and Jobs Act has eliminated the ability to deduct unreimbursed business expenses.
Are moving expenses adequate for your family size and distance? Before agreeing to a moving expense amount, it is important to get several estimates from national moving companies.
Important Note: Under the 2017 Tax Cuts and Jobs Act, reimbursement for moving expenses is now treated as taxable income. We are suggesting that the congregation gross up your moving expense by 25-35% to cover your additional taxes.
If you are thinking of moving to the United States from Canada, or vice-versa, have you explored the legal and financial issues? If you have a medical condition, you may have trouble establishing eligibility for health care in Canada. If the congregation you are called to in the U.S. doesn’t have its own 501(c)(3) designation letter, then you most assuredly will have trouble getting the necessary visa.
V. Pay Attention to Equity
As you negotiate for yourself, be attentive to what other staff are receiving. Are UUA salary and benefit recommendations met for all staff? How important is staff team equity to you? How do the terms of other employment agreements compare to yours? What do the personnel policies say? Is the congregation’s leadership committed to having a more diverse staff? Live into the UUA’s commitment to economic justice by advocating for the rest of the staff!
VI. Understand Governance and Authority
Does the congregation operate under a policy-based governance model? What authority will you have as minister? What is your role in congregational management? Are you the Lead Executive? Head of staff? If you are in charge of staff, do you have the authority to hire and fire? (We’re not suggesting that it’s wise to make staff decisions single-handedly, but neither should your hands be tied.) Make sure that your authority aligns with your accountability.
VII. Legal Matters in Compensation
In early 2020, the UUA made a shift from Compensation Guidelines to Compensation Standards in order to incorporate legal requirements for the administration of pay and benefits. Compensation-related errors disadvantage employees (including ministers), put the congregation at legal risk, are out of sync with our values, and can be costly and burdensome to fix - yet they happen at a disturbing rate in our congregations.
Might the congregation be incorrectly classifying employees as independent contractors? Missing critical insurance plan enrollment deadlines? Failing to make retirement plan contributions to eligible staff? For your own good and that of your potential future staff teammates, we urge you to inquire as to whether the congregation is making use of our Pay Administration Checklist, Benefits Administration Checklist, and Benefits Tune-up Workbook.