Proverbs 16:16 How much better to get wisdom than gold! To get understanding is to be chosen rather than silver.
Great leaders are great learners. They constantly read, listen to podcasts, and further their education.
Pastors should be constantly working to gain knowledge to do more effective Kingdom work. We are called to be good stewards and great leaders. You can’t be either once you stop learning.
Education has a cost and often pastors see continuing education as financially impossbile. Many church boards see the value in investing in their staff and are willing to supplement educational expenses.
What are the best ways to do so?
Some churches simply increase the pay of their pastors. It seems like a simple solution, but it creates a larger tax burden on staff. The increase is taxable income. Not the best solution!
Other options require a little set up, but provide staff with educational assistance with no additional tax burden.
Direct Payment to Institution
Instead of reimbursing the pastor, the church may pay the school or program directly. Has the same limits as an Educational Assitance Program.
Pros:
- Avoids confusion over personal reimbursement.
- May still be treated as a business expense if under an accountable plan structure.
Educational Assistance Program (IRC 127)
Churches can establish a formal educational assistance program.
Key Points:
- Up to $5,250/year in education expenses can be tax-free to the employee.
- Can cover tuition, fees, books, supplies.
- Must be offered under a written plan and cannot favor highly compensated employees.
- Not limited to job-related courses (unlike accountable plans).