We (MinistryCPA) were recently asked our opinion on the setup of a church's budget.
A church wants to know if their budget should individually list the compensation of each staff person instead of combining employee salaries/wage for each type of employee that the church employs. For example, the church budget has a line for the pastor, youth minister, church secretary, etc., but then the budget combines all the part-time employees, such as nursery and accompanists. There have been discussions concerning the privacy of the employees, so how detailed should each line item be?
In our experience, churches use a wide array of practices when it comes to budget and personnel. One extreme is including each employee's pay--even a breakdown of the compensation package. The opposite extreme is one number on the budget for the total of all the compensation, including benefits, of all the employees.
We like the approach of developing a budget on a per-program basis. For example, a church could include the compensation of the youth staff and youth pastor in a budget for Total Youth Programs. Each program would still give a single budget for the compensation of each program.
Although we don't suggest listing out each employee's compensation package in complete detail, in most cases (we believe) members of the church should be given the opportunity to see the compensation breakdown if they desire.
The Apostle Paul reminded the members of the Corinthian church that God had established "that they which preach the gospel should live of the gospel" (1 Corinthians 9:14). Many active members take this as both a corporate and individual responsibility and want to know whether "liveable" compensation is being provided.