Cutting Salary Better than Cutting Benefits

According to a new survey published by Christianity Today International, average compensation for ministers decreased about 2.4% in 2009, reflecting the budgeting decisions made by churches in the wake of the nation’s economic recession. One of the problems of cutting non-taxable fringe benefits is that the employee is then forced to replace those benefits with after-tax dollars from their already reduced paycheck. This has a compounded negative impact on the employee’s take home pay. If at all possible, churches (or any employer for that matter) who are considering a reduction of payroll costs should strive to maintain non-taxable fringe benefits and first reduce taxable compensation. (Christianity Today International publishes an annual Compensation Handbook for churches).