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Negotiating a Call

Terms of Call

Within the PC(USA) setting, compensation for ministers (especially those serving as pastors) is referred to as "terms of call." Because ministerial income is treated in some very specific ways for both purposes of US tax law and possible benefits from the PC(USA)'s Board of Pensions, there are some particular things you will need to know when negotiating a call with a congregation or another agency.

 

What type of position is this? “Installed” or “Temporary” (G-2.0504a & b)

“Installed” calls can be for an “indefinite period” or for a “designated term” with a predetermined end date. A “temporary pastoral relationship is for … a specified period not to exceed twelve months,” although it may be renewed with the presbytery’s approval. Presbyteries have different terms for identifying “temporary” relationships, so be clear as to whether the position is “installed” or “temporary.”

 

What will be your compensation (salary and benefits)?

Effective Salary = Cash Salary + Housing Allowance

When negotiating a call your cash salary and housing allowance are negotiable.  If the church provides a manse in lieu of a housing allowance, the value of the manse is usually set at the equivalent of at least 30% of the cash compensation for effective salary and tax purposes. Housing allowances cannot exceed the "fair market value" for the location, and any unused portion of the allowance becomes taxable income. 

Other items to negotiate: SECA [Self-Employment Contribution Act] salary adjustment, utilities, and professional expenses (mileage, continuing education and book allowances, etc.).  Most presbyteries have a policy about such items, so check with your calling presbytery for more information. Also, know what the “presbytery minimum salary” is (even if you know the offered salary is higher or the church has been granted a waiver to offer a lower salary); it may give you an idea about regional costs of living (which vary greatly across the country).

To Do: Obtain an annual declaration of your housing allowance for tax purposes, and be sure it is recorded in the Session’s minutes. Keep in mind these declarations must be "proactive," that is, formally approved before the compensation is paid. You cannot create or change a housing allowance "after the fact."

Leave is provided for Rest, Sabbath, and Continuing Education

All Terms of Call include leave in the following categories as a benefit to church workers:

        • Annual Leave (Vacation and set holidays—sometimes “offset” [Easter Monday, Dec. 26])
        • Study Leave (continuing education and possibly Sabbatical after specified years of service)

Other items to negotiate: Sick Leave and Family Leave [FMLA] (may be paid or unpaid according to presbytery policy). Will such leave be awarded on an “accrual basis,” or will it be granted “as needed” with negotiation for “leave of absence” if an extended need arises?

Insurance Augments: Dental, Supplemental Life, Co-Coverages

Questions to ask: Who will pay for any elected optional coverages through the Board of Pensions? What opportunities are available to establish a “Flexible Spending Account” for either medical or dependent care expenses?


Moving Costs are a Negotiated Item

This is an essential item to discuss with PNCs. Some congregations cover the full cost of a move. Most congregations cover the cost up to a maximum amount. Know both the amounts agreed to and the process the congregation expects to be followed (multiple bids submitted, reimbursement or direct bill, etc.). Also, keep in mind that any moving expenses paid by your employer are taxable income, so you will need to reserve funds to cover this extra tax liability.

 

Managing Educational Debt

Investigate “Income-Based Repayment” (IBR) and other student loan repayment options (http://www.consumerfinance.gov/students/repay/).  IBR offers up to three years of interest subsidies to ease the transition into repayment.

Congregations with 150 members or less meet one of several requirements for debt assistance offered by the Board of Pensions and the General Assembly Mission Council, if:


RESOURCES

The Office of the General Assembly Mid Council Ministries, The Presbyterian Church (U.S.A.): http://oga.pcusa.org/section/mid-council-ministries/mid-council-ministries/

PC (USA) Call System/Church Leadership Connection: http://www.pcusa.org/clc

http://www.pcusa.org/prep4min

http://www.pcusa.org/financialaid

The Board of Pensions: http://www.pensions.org

Understanding Effective Salary: https://www.pensions.org/file/what-we-offer/benefits-guidance/forms-documents/Documents/pln-103.pdf/

Session Personnel Policy Guidelines: 

https://www.pcusa.org/site_media/media/uploads/oga/pdf/employment_guidance_for_sessions_and_session_personnel_committees_2021.pdf
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