What Should Be in a Pastor's Job Agreement (with Examples of Clauses)

A pastor employment agreement is an important contract that lays out the pastor's duties and responsibilities in a church. It makes clear what is expected, what each person's duties are, preserves legal rights, and decreases the possibility of costly disputes. But many churches don't have complete, well-written contracts, which puts both the pastor and the ministry at risk.

This guide covers all the major components that should be in a pastor's employment agreement, explains why each one is vital, and gives you examples of clauses you may use as a starting point. We'll also show you how Church Law and Strategy's tiered subscription plans, which go from the STARTUP PLAN (Tier 1) to the EXECUTIVE PLAN (Tier 4), give churches of all sizes the legal expertise they need to draft strong pastor contracts.

A Full Pastor Employment Agreement Is Necessary

A good pastor employment agreement does more than just say how much the pastor will make. It also makes sure that your church's leadership is honest, that you follow nonprofit and employment laws, that the housing allowance is used legally according to IRS guidelines, and that the pastor and church leaders trust each other.

Without a strong agreement, churches have to deal with the following issues:

• There could be legal conflicts over salary, duties, or termination.
• IRS audit or tax issues with housing benefits or allowances.
• Issues with governance, such as not knowing who is in charge and what their duties are.
• Pastoral burnout or turnover because expectations aren't explicit.

Things That Every Pastor's Employment Agreement Needs to Have

1. The names of the parties and the date it goes into effect

Make sure to clearly write down the church and pastor's legal names as the people who are signing the agreement.

You need to say when the agreement starts and what kind of work it is, like full-time, part-time, or contract.

1. How long the job will last and how to end it

Predetermine a time limit for the work and say whether it is at-will or for a predetermined amount of time.

Write out the steps and notice periods for quitting on your own or being fired by the church.

Give examples of reasons for terminating someone "for cause," such as bad behavior or not doing their job.

Include severance clauses if you need to.

1. A complete list of tasks and obligations

Tell them what the pastor does, like preaching, counseling, doing office work, and being in charge of church committees or the church government.

Make sure everyone knows what the rules are for work hours, reporting, and spiritual leadership.

1. Pay and Benefits

Tell them how much the base wage is and how often they will get it.

Clearly state the housing allowance in a way that meets IRS rules for parsonage allowances.

Make a list of the benefits, like health insurance, retirement programs, vacation time, sick leave, and continuing education.

Talk about ways to get your money back for charges related to the ministry.

1. Privacy, not sharing, and intellectual property

Add terms that protect private church information while someone is working there and after they leave.

Talk about who owns and has the right to utilize sermons, writings, and other intellectual property made while working.

1. Not asking or competing

If you need to, set limits on the pastor's ability to compete with or seek church members for business after they leave, as long as they are reasonable in terms of time and place.

1. Ways to settle arguments

Set up mediation or arbitration to help people work out their differences at work so they don't have to go to court.

1. Protection from liability and compensation

Don't hold the pastor personally liable for things done in good faith for the church.

1. Other Terms

There should be a law that controls the agreement, a way to change it, a comprehensive agreement clause, and places for signatures.

These Clauses Should Be in Your Pastor Employment Agreement

Pay and Housing Allowance: "The Church agrees to pay the Pastor $X a year, which will be paid every two weeks. The Church sends the Pastor $Y per year for housing, which the Pastor can take out of their federal income tax as long as the IRS lets them."

Term and Termination: "This Agreement begins on [Date] and will stay in effect until one of the parties gives the other 90 days' written notice that they desire to end it. If someone does something really bad, breaks church regulations, or breaks a contract, they may be fired right away 'for cause.'

Responsibilities and Duties: "The Pastor will spiritually lead the church, preach regularly, provide pastoral care, oversee ministry staff, and go to all church board meetings."

Confidentiality: "The Pastor promises to keep church members, money, and sensitive ministry information secret while they are working and after they leave."

Indemnification: "The Church agrees to protect the Pastor from any legal claims or debts that come up because of actions taken in good faith while on the job."

How Church Law and Strategy Can Help You Make a Contract with Your Pastor

The STARTUP PLAN (Tier 1) gives new churches basic legal assistance and templates for employment contracts.

The Foundation Plus Plan (Tier 2) involves establishing contracts that are unique to each client, doing legal audits for churches, and applying for trademarks.

The Pastor Support Plan (Tier 3) includes checking contracts every three months, getting priority legal advice, and checking to see if the company is following the rules.

The Executive Plan (Tier 4) comprises a full-service legal partnership, advanced governance consulting, and keeping an eye on how the strategic ministry works.

The tiers are created to meet the needs of churches of all sizes, from small ones with fewer than 100 members to megachurches with severe legal issues.

To sum up

Writing a formal pastor employment agreement takes time and money, but it preserves your church's mission, minimizes the risk of legal complications, and helps pastors keep their jobs for a long time. Churches that engage with Church Law and Strategy get advice from lawyers who know how to design employment contracts that follow both the law and the values of the church.

Links inside

• Learn more about the legal plan for paying pastors.
• Read our church's report on legal audits and compliance.
• Learn how to follow the church's HR and hiring rules.

Links to Other Sites

• IRS Parsonage Allowance Guidelines
• Christianity Today – Employment Contract Tips
• Nonprofit Legal Center – Sample Employment Agreements

This blog post is for informational purposes only and does not give legal advice. You are not a customer of Church Law and Strategy or its agents just because you read this. Please talk to a lawyer who knows your church or organization well for specific legal advice.