# Sample Salary Increase Calculation - PDF

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```					     SAMPLE-- 2009 Pastoral Worksheet for Calculating Cash Salary, Housing Declaration & Social
Security
(Read and review the instructions before completing this worksheet)
SAMPLE – USING A PARSONAGE & UTILITIES PAID BY THE CHURCH
Pastor: Rev. John Jones                                           Church: 1st E.C. Church, Anywhere, PA
I. CASH SALARY – calculation – use ONE of the following 4 options- the Local Church determines the option
For pastors living in a parsonage, use options I.a. or I.b. only.
For pastors given a Housing Allowance, use any of the 4 options and seefurther instructions below.

a) PERCENTAGE INCREASE

2008 Cash Salary \$ 45,000 X 2.3% increase                = 2009 increase \$ 1035.00

2009 increase \$1035.00           + 2008 Cash Salary \$ 45,000 = 2009 Cash Salary \$ 46035

b) PERCENTAGE INCREASE + MERIT RAISE

2008 Cash Salary \$_________ X 2.3 % increase + merit raise_____ % or \$ __________ = 2009 increase \$_________

2009 increase \$__________ + 2008 Cash Salary \$___________ = 2009 Cash Salary \$__________

Enter 2009 Cash Salary figure on Worksheet: III. Social Security line a) AND IV. Taxable Salary line A.
Enter 2009 Cash Salary figure on 2009 Statement of Pastoral Compensation, line A

c) PERCENTAGE INCREASE INCLUDES 2008 CASH SALARY + HOUSING ALLOWANCE

2008 Cash Salary \$__________ + 2008 Housing Allowance \$__________ = 2008 Total \$ __________

2008 Total \$_________________ X 2.3 % increase = 2009 increase \$__________

2009 increase \$__________              + 2008 total \$____________                      = 2009 Total \$________________

Determine how much of the new total is the 2009 Cash Salary and how much is the 2009 Housing Allowance.
2009 Total \$__________=    2009 Cash Salary \$_______________ + 2009 Housing Allowance \$______________

d) PERCENTAGE INCREASE INCLUDES 2008 CASH SALARY + HOUSING ALLOWANCE + MERIT RAISE

2008 Cash Salary \$__________ + 2008 Housing Allowance \$__________ = 2008 Total \$ __________

2008 Total \$____________ X 2.3 % increase + merit raise ___% or \$ __________ = 2009 increase \$_________

2009 increase \$__________              + 2008 total \$____________                      = 2009 Total \$________________

Determine how much of the new total is the 2009 Cash Salary and how much is the 2009 Housing Allowance.
2009 Total \$__________=    2009 Cash Salary \$_______________ + 2009 Housing Allowance \$______________

For pastors given a Housing Allowance:
If the pastor is not designating part of his cash salary for housing, then use appropriate 2009 Cash Salary figure from I.a, I.b,
I.c. or I.d as the Cash Salary and enter as follows:
-Enter 2009 Cash Salary figure on Compensation Worksheet Item III. Social Security line a & Item IV. Taxable
Salary line A.
-Enter 2009 Cash Salary figure on 2009 Statement of Pastoral Compensation, line A

-Enter 2009 Housing Allowance amount from the church on Compensation Worksheet Item III. Social Security b. &
ItemV. Actual Salary to be Received, line B.
-Enter 2009 Housing Allowance amount from the church on 2009 Statement of Pastoral Compensation, line B.

If the pastor is designating part of his cash salary for housing, do not enter the 2009 cash salary figure as instructed above.
Proceed to Section II. 2009 Declaration of Housing Allowance & complete adjusted cash salary & Housing Declaration

Page 1

II. 2009 DECLARATION OF HOUSING ALLOWANCE
2009 Cash Salary (I.a, I.b, I.c or I.d from page 1)          \$________________
- (minus) Amount designated for Housing by pastor               \$________________
= 2009 Adjusted Cash Salary                                     \$_________________
Enter 2009 Cash Salary figure on Compensation Worksheet Item III. Social Security line a & Item IV. Taxable Salary line A.
Enter 2009 Cash Salary figure on 2009 Statement of Pastoral Compensation, line A

b) HOUSING DECLARATION:
Amount Designated by the pastor's Church                         +     \$__________________
+ Amount Designated from Cash Salary by the Pastor                 +     \$__________________
= 2009 Housing Allowance Declaration                               =     \$__________________
Enter 2009 Housing Allowance Declaration on Worksheet Item III. Social Security b. & Item V. Actual Salary to be
Enter 2009 Housing Allowance Declaration on 2009 Statement of Pastoral Compensation, line B.

III. SOCIAL SECURITY-calculation
a) 2009 Cash Salary                                                         +                        46,035
b) Housing Allowance                                                        +                        __________
c) Rental Value of the Parsonage (if applicable)                            +                        10,800
d) Utilities paid by the Church (if applicable)                             +                         6,000
e) Personal Flexible Spending Account Contribution(if applicable)           -                         2,400
f) Pre-Tax Health Insurance premium Co-pay (paid by the pastor)            -                        __________
g)Total                                                                     =                        60,435
h) X .0765 (1/2 of Social Security Rate)                                    =                         4,623
Enter the figure from III.h. on Worksheet below as IV-B Taxable Compensation
Enter the figure for III.h on 2009 Statement of Pastoral Compensation, line C.

IV. TAXABLE COMPENSATION
A. 2009 Cash Salary                                                                   \$ 46,035
B. One-half Social Security (see Worksheet for Calculation)                     +     \$ 4,623
C. Less Parsonage Furnishings Allowance**                                       -     \$ 6,000
D. Less Personal Pensions Contribution (W-2.Box 12A)                            -     \$ 2,400
E. Less Personal Contribution Health Flexible Spending Account (FSA) -                \$ 2,400
F. Less Health Insurance Premium Co-Pay (pre-tax)                               -     \$ _________
G. Total Taxable Compensation (W-2, Box 1)                                            \$ 39,858
(Housing Allowance is not included in Taxable income. It is reported in Box 14 of the W-2.
Any unused portion of the Housing Allowance is reported by the pastor on Line 21 of his IRS Form 1040 as Other Income

V. ACTUAL SALARY TO BE RECEIVED
A. Total Taxable Compensation (figure from IV. G)                                            \$ 39,858
B. Housing Allowance OR Parsonage Furnishing Allowance                                 +     \$ 6,000
TOTAL                                           \$ 45,858
For those living in a parsonage: (Amount of cash salary excludable for parsonage furnishing allowance as designated by the Local Conference
\$6000.00 in accord with IRS Code Section 107 and not included in taxable income, Box 2, W-2, but reported in Box 14, W-2, along with the Parsonage
Rental Value)

VI. NON-COMPENSATION ITEMS (if applicable, include in Social Security Computation)
A. Parsonage Rental Value (those living in church supplied housing)                                \$ 10,800
(Fair Rental value appraisal required every 3 years)
B.   Parsonage Utilities (paid by the church, estimate)                                         \$ 6,000
C. Vacation         Number of Weeks __             4 _
(Vacation Year: July 1 to June 30 (NC Rule 1002.1)
Attach the Compensation Worksheet pages to the Statement of Pastor's Compensation Package Form.
The signatures below represent approval of these 2009 salary calculations by the Local Conference.
Pastor: Rev. John Jones                                       Date 11/11/2008
Chairman of Official Board/Ministry Council: Mr.               Stanley Smith               Revised Aug., 2008              Page 2

SAMPLE -- 2009 Statement of Pastor's Compensation Package
[This statement reflects the actual costs to the local church for pastoral services, not the actual amount paid to the pastor].

Pastor: Rev. John Jones                                     Church: 1st E.C. Church,                             Anywhere, PA
Clergy Classification: Itinerant Elder
(See the Ministerial Classification pages in Section 1 of the National Conference Journal)

(Circle One) Full-time or Part-time [If part-time, enter the number of hours employed per week :______]

A. Cash Salary (see Compensation Worksheet Section I.a., I.b, I.c. or I.d for Calculation)               \$ 46,035
(Refer to 2008 Compensation Report for Minimum Salaries)

B.    Housing Allowance (See Compensation Worksheet Section II for calculation)                          \$ _________
(Amount paid in lieu of parsonage-Fair Rental value appraisal required every 3 years)

C.    One-half Social Security(See Compensation Worksheet Section III for Calculation)                           \$      4,623

D. Paid to the Benefits Corporation by the Church
1. Health Insurance Premium                  Family                                                   \$ 16,548

2. Disability Insurance (due Jan. 15)                                                               \$    100

3. Contribution to the 403b retirement plan
(Full-time \$1680/yr; part-time \$840/yr)                                                             \$ 1,680

E.    Health Care Flexible Spending Account (FSA)-(church contribution)                                  \$    500
(See NC Rule 1002.7 \$500.00 – for AETNA plan participants only)

F. Continuing Education Assistance Reimbursement (Minimum \$750)                                          \$    800

G. Accountable Reimbursements
1) Travel (at IRS established rate)                                                                   \$ 2,500

2) Professional Expenses                                                                           \$ 1,000

H.    Housing Equity Account Contribution (optional)                                                      \$    500

I.   Other Fringe Benefits: (Specify purpose and amount)
_________________________________                                                               \$ _________
_________________________________                                                              \$ _________

TOTAL COMPENSATION PACKAGE                                                                               \$ 74,286

Attach the Statement of Pastors Compensation Package to Compensation Worksheet pages.
The signatures below represent approval of this 2009 salary package by the Local Conference.

Pastor:   Rev. John Jones                                                                              Date 11/1/2008

Chairman of Official Board/Ministry Council: Mr.               Stanley Smith                            Revised Aug., 2008
SAMPLE -- Pastor's Compensation Agreement Form
Parsonage Furnishings Allowance or Housing Allowance Resolutions
January 1, 2009 to December 31, 2009

Adopt one of the Following Resolutions:
A. When the Church Owns the Parsonage:

The Chairman of the Governing Body has informed the Local Conference of the First Evangelical
Congregational Church that under the tax law, a minister of the Gospel is not subject to federal income
tax on “the parsonage allowance paid to him as part of his compensation to the extent used by him to
provide a home.” The parsonage is owned by the church and actual utility expenses will be paid by the
church. Motion was made, seconded and approved by the Local Conference to adopt the following:
Resolved that the Total Salary of Rev. John Jones be established at **\$ 50,658 for the calendar year,
and that the amount of \$6000.00 from the salary be designated as Parsonage Furnishings Allowance,
according to IRS Code Sec.107. This resolution shall be good and valid for the upcoming salary year and
all years afterward unless changed by this body."

Date: 11/1/2008                            Signed: Mr. Stanley Smith
Chairman: Official Board/Ministry Council

Rev. John Jones
Pastor

**Total Salary includes taxable cash salary \$39858 + Personal Pension Cont. \$2400 + Personal FSA Cont. \$2400 +
\$6000 Parsonage Furnishings Allowance

B. When the Pastor Owns or Rents his own Home:

The Chairman of the Governing Body has informed the Local Conference of the __________________
Evangelical Congregational Church that under the tax law, a minister of the Gospel is not subject to
federal income tax on “the housing allowance paid to him as part of his compensation to the extent used
by him to rent or provide a home.” The pastor will assume all expenses for his home. Motion was made,
seconded and approved by the Local Conference to adopt the following: “Resolved that the Total Salary
of Rev.____________________ be established at \$ _______________ for the calendar year, and the
amount of \$ ____________ be designated as a Housing Allowance, according to IRS Code Sec. 107.
This resolution shall be good and valid for the upcoming salary year and all years afterward unless
changed by this body."

Date: ____/____/____                       Signed: ____________________________________________________
Chairman: Official Board/Ministry Council

____________________________________________________
Pastor
Revised August, 2008

SAMPLE -- Pastor's Compensation Agreement Form
Accountable Reimbursement Plan Resolutions for Travel and Professional Expenses
January 1, 2009 to December 31, 2009

Adopt one of the Following Resolutions:

A. Unlimited Travel Reimbursement with Limited Professional Expenses Reimbursement:
The Chairman of the Governing Body has informed the Local Conference that according to Sec. 62(a)(2)(a) of the IRS Code, an
employee that adequately accounts to the employing body of his professional expenses is allowed a deduction from gross
income. Sec 62(C) further requires an employee to return any excess reimbursement or advance to the employer within a
reasonable time. Reg. 1-62-2(d)(3) further requires that no part of an employee’s salary be re-characterized as being paid
under this reimbursement arrangement. Motion was made, seconded and approved by the Local Conference to adopt the
following: “Resolved that in addition to the salary provided as an employee, the ____________________ E.C. Church will
reimburse the pastor for an unlimited amount for auto/travel expenses incurred related to his duties and responsibilities and \$
________________ for professional/business expenses, considered ordinary and necessary for him to carry out his duties.
Expenses must be substantiated to the Church Treasurer as to the date, amount and purpose within 30 days after they are
incurred. Any excess reimbursement must be refunded to the church within 60 days after the expenses are paid or are incurred.
This resolution shall be good and valid for the upcoming salary year and all years afterward unless changed by this body."

Date: ____/___/_____                       Signed: _________________________________________________________
Chairman: Official Board/Ministry Council

__________________________________________________________
Pastor

B. Limited Travel and Professional Expense Reimbursement:

The Chairman of the Governing Body has informed the Local Conference that according to Sec. 62(a)(2)(a) of the IRS Code, an
employee that adequately accounts to the employing body of his professional expenses is allowed a deduction from gross
income. Sec 62(C) further requires an employee to return any excess reimbursement or advance to the employer within a
reasonable time. Reg. 1-62-2(d)(3) further requires that no part of an employee’s salary be re-characterized as being paid
under this reimbursement arrangement. Motion was made, seconded and approved by the Local Conference to adopt the
following: “Resolved that in addition to the salary provided as an employee, the First E.C. Church will reimburse the pastor
\$ 2,500.00 for auto/travel expenses incurred related to his duties and responsibilities and \$ 1,000.00 for professional/business
expenses, considered ordinary and necessary for him to carry out his duties. Expenses must be substantiated to the Church
Treasurer as to the date, amount and purpose within 30 days after they are incurred. Any excess reimbursement must be
refunded to the church within 60 days after the expenses are paid or are incurred. This resolution shall be good and valid for the
upcoming salary year and all years afterward unless changed by this body."

Date: 11/1/2008                            Signed:   Mr. Stanley Smith
Chairman: Official Board/Ministry Council

Rev. John Jones
Pastor

(Revised August, 2008)
SAMPLE -- Flexible Benefit Plan
Health Care Flexible Spending Account (FSA) Agreement Form
January 1, 2009 to December 31, 2009
Whereas, First E.C. Church through the Evangelical Congregational Church Benefits Corporation provides a
comprehensive program of benefits for its pastors
Whereas, First E.C. Church wishes to establish a Health Care Flexible Spending Account (FSA) to allow
reimbursement for eligible medical expenses, related to expenses not covered, such as deductibles, co-insurance
and non-covered amounts as explained in the Flexible Benefits Plan-Summary Plan Description as administered by
the E.C. Church Benefits Corporation.
Resolved, that First E.C. Church establishes a Health Care Flexible Spending Account (FSA) effective Jan. 1, 2008
for the benefit of our pastor [working at least 25 hours or more per week] and his dependents (pastor's spouse
and minor children) under Section 105b, (e) of the Internal Revenue Code;
Resolved, that the Flexible Spending Account shall be maintained for the pastor from which covered expenses (as
defined in Section 213 of the Internal Revenue Code) for the pastor or his dependents shall be reimbursed.
Resolved, First E.C. Church shall contribute \$500 to the pastor's Flexible Spending Account as approved by
National Conference (NC Rule 1002.7).
Resolved, that Rev.John Jones has established an amount of \$2400.00 to be contributed to this Flexible
Spending Account as a payroll reduction from his cash salary. The maximum combined contribution between the
pastor and church shall not exceed \$4000.
Resolved, that the church contribution to the FSA shall be the first monies disbursed as reimbursement each year.
Resolved, that there shall be only one salary reduction election by the pastor each year. This election may be
changed during the year only if your 'change in status' meets the criteria as outlined in the Summary Plan
Description.
Resolved, that the submission of medical expenses must be in a form and sufficient detail to meet the requirements
of the Church and the Internal Revenue Service. If the pastor has been enrolled in the Plan for the full Plan year,
expenses may be submitted until March 31 for expenses incurred in the previous calendar year. At that time, any
balance remaining in the pastor's account from either the church's or the pastor's contribution as of the end of that
calendar year, for which those expenses were submitted, shall be forfeited by the pastor and the church. These
funds shall be remitted to the Plan Administrator, EC Church Benefits Corporation as per IRS Code Section 125.
Resolved, that the plan shall be administered in a nondiscriminatory manner and shall remain in effect until
modified or terminated by a later resolution.
Motion made by Robert Wagner and seconded by Amy Anderson
and passed to adopt the above resolution.

Signed:    :   Mr. Stanley Smith
Church Official and Office

Rev. John Jones
Pastor

Date:      11/1/2008

Please send a copy of this form to: Rev. Ken Wiest at the address above, along with the other Pastor's Compensation Forms as
soon as the salary package has been set and no later than Jan. 15.
(Aug., 2008)

SAMPLE -- Evangelical Congregational Church
FLEXIBLE BENEFIT PLAN
Health Care Flexible Spending Account (FSA)
The Evangelical Congregational Church has established a Flexible Benefit Plan within the meaning of Section 125 of the Internal
Revenue Code of 1986. The Flexible Benefit Plan has been established to offer a choice among benefits with the intent that
participants will not have to include as taxable income the amount of compensation they have foregone to pay for contributions to
eligible benefits offered by your employer. This Summary Plan Description (SPD) describes the benefits, terms, and conditions of the
Plan as it applies to the eligible participants as described in the Evangelical Congregational Church Benefits Corporation By-Laws
Article IX, Section C. The Health Insurance Plan on or after their effective date for participation.

This is a summary of the Flexible Benefit Plan and is not meant to interpret, extend or change the Flexible Benefit Plan in any way.
We suggest you read the summary carefully so that you may understand the Flexible Benefit Plan's operation and its benefit to you..

Plan Name: Evangelical Congregational Church Flexible Benefit Plan

Plan Effective Date: Jan. 1, 2009 to December 31, 2009

Plan Year: January 1 – December 31

EC Church Benefits Corporation
100 West Park Avenue
Myerstown, PA 17067
(717) 866-7581

Maximum Contribution: \$4000 (combined pastor and church contribution)

Name of Pastor (Plan Participant): Rev. John Jones

Name of Church (employer) : 1st E.C. Church
Address: 200 Main St., Anywhere, PA 11111

Phone: 888-888-8888

Employer's Federal Identification Number (EIN): 99-9999999

Church Agent for Service for Review of Claims:        Name: Amy Anderson, Treasuer
Address: 10 S. Market St, Anywhere PA 11111

Phone:888-999-7777
Date Approved: 11/1/2008

Effective Date: :1/1/2009

Signed:   Rev. John Jones (Plan Participant)

Mr. Stanley Smith, Chairman of the Board        (Church Representative)
(provide name and church office)

Please retain this information for future reference.

This summary plan description describes a cafeteria plan under Section 125 of the Internal Revenue Code of 1986 which
includes one or more flexible spending account(s) as benefits eligible for selection by participants.
Please send a copy of this form to: Rev. Ken Wiest at the address above, along with the other Pastor's Compensation Forms as
soon as the salary package has been set and no later than Jan. 15.

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