The following question was posted to our blog:
"I want to know if all the tithes collected by the church [are] the income of the Pastor only?"
While we are not sure how to take this question, it does bring up two interesting considerations:
1. Are all tithes collected reported as income to the pastor? (a tax question)
2. What processes are advisable in determining how much of a church's income should be used to support its pastor and his family? (a budgeting question)
Unless donor designated, contributions to a church are considered as donated to the ministry's general fund. Only the portion paid to the pastor as his salary out of the general fund is considered as income to him.
The church should have an established budget. For example, if the church does not have an established budget and all offerings are income to the pastor, how are the mortgage and utilities paid? Another issue if the church does not have an established budget, how are missions funded?
If a church wishes to develop a budget with an appropriate salary for its pastor, a great resource is Richard R. Hammar's annual handbook of compensation for church staff. We at MinistryCPA like to use this material as we advise churches. The resource considers variables such as the size of the church's attendance and income, the location of the church both within the U.S. and with respect to urban versus rural cost of living realities, and the pastor's education and tenure.