Step Four

Salary and Benefits Package

A fair and just salary and benefit package for the principal is in the best interest of your school, the children and is right for the church. Effective and competent Lutheran School principals deserve adequate compensation.

• Review the package of your former principal. Was it appropriate?

• Evaluate your school's salary scale.

• Compare what you propose to pay your new principal with the top salary paid to a teacher and to the salary paid to your pastor and other church staff. Serving as a Lutheran School principal is a full-time ministry, not a ten month per year assignment.

There may be circumstances when the school principal may be paid equal or more than the pastor. This might be the situation when taking into account educational background, years of relevant experience and responsibilities. It is important for a congregation to have a comprehensive view of salaries for all employees when at all possible.

In addition to base salary, be sure to include FICA and other legally mandated expenses related to an employee Also include the cost of the health plan, retirement/deferred income program, continuing education allowance, professional conferences and professional organization dues. Do not overlook these. Many surveys now indicate benefits to have become almost as important to U.S. workers as salary. In a recent survey, more than 85% who responded the following were extremely important: retirement plan, dental plan, preventive health care, medical insurance and vision care.

Holidays and vacations form a part of the compensation package. Be clear about expectations for the principal regarding duties during special breaks, e.g. Christmas and Spring breaks. For example, if the principal does not report during Christmas break, is that considered part of the four weeks of vacation time given to the principal. What are the expectations for duties over the summer? While some of the above details may need to be negotiated later, there does need to be some general agreement up-front regarding paid vacation and days off.

Sometimes the question is asked, "Does our school principal qualify for a housing allowance which is tax exempt, like that of a pastor?" Only church rostered persons whom the IRS has designated as "ministers of religion" qualify for this exemption. In the ELCA this includes only persons authorized for Word and Sacrament Ministry and a few Associates in Ministry who were grand-parented into the ELCA via the former Association of Evangelical Lutheran Churches (AELC).

One of the best financial investments a school can make is in its principal and teaching faculty. An effective principal is critical to articulating and achieving the school's mission. Effective principals lead in securing the funds to carry out that mission. The salary you offer your principal is a key indicator of the importance you attach to the ministry of your school. Allocating sufficient funds to secure the best principal possible is one of the wisest decisions a Lutheran school board can make..

See also
Eight Steps to a Successful Executive Director Evaluation 
Director/Principal Assessment Questionnaire 
Sample Administrative Policy