5 Best Practices for Handling Other Ministry Income

There is no prescribed manual for all ministers on the right protocol for receiving other ministry income such as weddings, funerals, revivals, and conferences. Some denominations or judicatories have very specific guidelines. A few churches have their own guidelines as well. But most do not. That is why ministers frequently ask questions related to other ministry income.

First, let me say clearly that there is not just one way to deal with ministry income. In most cases, there is no right or wrong. What I have done is talked with dozens of ministers and devised “best practices.” You certainly have much flexibility with these practices.

Second, all ministry income as taxable and should be reported, typically on Schedule C. Some ministers argue that it is gift income and is therefore exempt from taxation. The IRS is clear, however, that this income is earned in the course of your work and is thus subject to taxation.

Best Practice #1: It is okay to accept other ministry income.

You have earned this income by conducting a funeral, officiating a wedding, or speaking somewhere beyond your church. You had to prepare extra work. You sometimes had to give up your weekends, particularly with weddings. It is one extra assignment to a schedule that is already busy.

Best Practice #2: It is generally advisable not to set fees.

Leave the amount that you will receive to those you are serving. Sure, that means you will sometimes receive very little and other times receive nothing. But you are already receiving a salary from your church. Fee setting typically sends the wrong message.

Best Practice #3: Be willing to do these services for nothing.

There will be some situations where the family or organization has very little financial means. Accept the reality that a certain number of your weddings, funerals, and speaking engagements will result in no outside income. For example, civic organizations and schools rarely will pay someone to speak. And there will be times that it is obvious the family or person cannot pay. Graciously decline any offers they make, and be grateful for the opportunity to minister to them.

Best Practice #4: Always express gratitude for anything you receive.

I know a few pastors who take a few minutes to write a brief handwritten note every time the receive a honorarium or stipend. That is a class act that should be emulated by others.

Best Practice #5: Do not anticipate other ministry income in your budget.

Other ministry income is unpredictable, uneven, and usually modest in amount. Do not build your financial lifestyle predicting these funds. Decide ahead of time how that money will be used and stick to it. Some ministers put it toward retirement. Some put it toward special savings accounts for items like automobiles. Some put it aside for their children’s college fund. Some use it to pay down extra principal on debt. And some give the funds to their spouses for extra spending money.

Should I opt out of Social Security? How much housing allowance do I take? Do I have enough for retirement? Should I ask for a raise? Why should I even care about my financial picture? The Minister’s Salary was written to shed light on some of the issues that seem to most burden ministers. With simplicity and clarity, it provides a holistic look at key financial issues. The Minister’s Salary is an excellent, concise resource for anyone seeking answers to some of the most common financial questions asked by ministers. Now available!

How Much Should You Pay a Guest Preacher?

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5 thoughts on “5 Best Practices for Handling Other Ministry Income

  1. My late cousin was a Methodist minister. His wife was the business end of their relationship. Each time he received an honorarium for a wedding, funeral, etc., she put this money in a separate special savings account. By the time he retired from the active pastorate, they had saved enough for a nice down payment on a house. Since they had lived in parsonages for many years, this was especially helpful.

    • Thanks, Charles. Great suggestion. It is amazing what a little bit of discipline with your finances can accomplish.

  2. These are great tips. I have come to the conclusion that if I’m asked to do out-of-town weddings, I will ask for travel expenses for myself and my family. As you say, these ministry opportunities are part of our profession and I never ask for any payment, though it is often given. I figure that between pre-marital counseling, rehearsal and the wedding, the couple is asking for me to be away from home at least 7 or 8 evenings on top of my normal responsibilities. Yes, I am very grateful and honored to be a part of those big life moments. But my family shouldn’t have to give up that much time with me without some acknowledgement from the couple. The church I serve knows–and protects–family first, and they are very understanding in this way.

    My wife and I decided when I started full time ministry ten years ago that any honorariums I receive will go into a “Vacation of a Lifetime” fund. When our children are grown and out of the house, we will take a vacation for two to somewhere that we wouldn’t have been able to afford otherwise. When people ask what I charge for a wedding or other occasion, I tell them that I don’t charge but if they choose to give something, it will go for this purpose. i.e. They should feel no pressure because we are not relying on their decision about giving something in order to buy groceries or other necessities. Every time I receive an honorarium, it gives us a chance to dream about where we’ll go so we have fun with it. Our youngest child is 5 years old, so we have 13 more years of fund building to go.

  3. In point 3 (Be willing to do these services for nothing) I agree whole heatedly with the title of this section. However, the last sentences made me recall a time when I tried to graciously decline a gift which had been extended to me. I inadvertently crushed the spirit of a dear senior adult widow who only wanted to bless me. Lord willing, I will not make this mistake again.