Churches Face Rising Costs as Salaries and Benefits Surge in 2024

According to the latest State of the Church Compensation Survey by ChurchSalary, churches nationwide are grappling with unexpected financial pressures in 2024, driven by a rise in staff salaries and benefits.

The survey revealed that churches had planned for a 4.5% increase in personnel budgets, but the reality has surpassed expectations, with an actual increase of 4.9%. The most significant surge occurred in the cost of benefits, particularly health insurance.

Aaron Hill, head of ChurchSalary, highlighted that the average cost of benefits, including health insurance, grew by 5.2%, with some churches experiencing hikes exceeding 6%. These figures stand in contrast to an anticipated 8.5% rise in healthcare costs for 2024, as reported by CNN.

Benefit expenses weren't the only concern. About 59% of churches reported higher healthcare benefit spending, while 34% increased retirement contributions. Despite these rising costs, over half of the churches maintained their 2023 staffing levels, though 16% reduced staff, mainly due to decreased giving and attendance.

Looking ahead to 2025, 65% of churches plan to keep their staffing levels steady, though expectations are tempered. ChurchSalary's forecast suggests that many churches aiming to “stay the same” may, in fact, face staff reductions. This cautious outlook is coupled with plans for a 3.3% cost-of-living adjustment and a 4.5% increase in benefits costs.

Matt Steen, co-founder of Chemistry Staffing, warned of additional financial strains. With an impending wave of pastor retirements and fewer young ministers entering the field, churches may face “sticker shock” as they compete for qualified candidates, potentially driving up salaries even further.

Steen advised churches to prepare by setting aside double the senior pastor's current salary to cover the costs associated with leadership transitions.

Adding to the financial burden, recent changes by the Department of Labor raised the minimum salary for exempt employees, affecting nearly 30% of surveyed churches. Attorney Dustin Hill from My Church Law Firm emphasized the importance of carefully documenting job duties to ensure compliance with these new regulations, especially for nonministerial staff.