These costs include the general categories of employee benefits and actual salary. The least advantageous way for a minister to be paid is to be given a lump sum amount out of which the minister must provide for professional expenses, employee benefits, and cash salary. They should be recognized and budgeted as local church expenses, not compensation. Some of the items that are related to these are not discretionary since the minister and family have no choice as to how the money is spent. The items of a nondiscretionary nature include most of the employee benefits listed below.
Most churches provide a parsonage and utilities.
Therefore, in most cases, the minister has no discretion as to how that part of compensation will be spent. The minister cannot voluntarily choose to live in a less expensive home and thereby free up income to cover other personal needs. Also, the minister cannot build equity for retirement housing. This is an essential part of the compensation package. This is the amount that the minister and family use to meet living expenses and over which they have some discretion in spending.