Church

Administration
Manual
Including Sample
Employee Handbook

July 2015
 INTRODUCTION

These pages have been compiled to provide facts relative to the financial administration of
a local church. It is our hope that church treasurers and/or bookkeepers will find this
information useful in performing their duties in this very important and necessary church
position.

Please note that throughout this document there are links to online resources, forms and
documents. These links are underlined in blue text. Churches will be kept updated as
changes or additions are made to any laws that affect Registered Charities.

If you have any questions regarding finances that need clarification or are not addressed
here, please do not hesitate to communicate with us. We are here to serve you!

Disclaimer
This manual is prepared to provide information and guidance on specific
topics and issues. Every effort has been made to be certain the information
is accurate; however it does not constitute legal or professional advice.

Gratitude is expressed to the following organizations for their assistance and

information provided in compiling this manual:

Canadian Council of Christian Charities

1 – 43 Howard Ave., Elmira, ON, N3B 2C9
519-669-5137 www.cccc.org

Evangelical Fellowship of Canada

Box 5885, West Beaver Creek Post Office, Richmond Hill, ON, L4B 0B8
905-479-5885 www.evangelicalfellowship.ca

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 Church Administration Manual
Table of Contents

Introduction

Local Church Financial Administration 4

Registered Charity Status 7

Ministry Support & Receipting Practices 10

Ministry Remuneration and Payroll 12

Employment Issues 17

Other Matters 19
(Church Insurance, Facility Use Policy, Marriage Policies, Church Copyright License, CD Levy, License,
Use of T4’s and T4A’s, Records Retention, Investing Church Funds)

Appendix A 22
Partnership Payment Calculations

Appendix B 24
- Suggested Job Description for a Senior Pastor B1
- Suggested Salary Schedule for AGC Pastors B2
- Travel and Expense Record B3
- Ministry Travel Expense Report B4

Appendix C 38
- Sample Employee Handbook C1
- Standards of Employment C3
- Full and Final Release Statement C2

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 LOCAL CHURCH FINANCIAL ADMINISTRATION

1. Duties and Responsibilities

a. Board of Directors
Directors of a charitable organization have a fiduciary duty in that they manage the affairs of the
organization and hold its assets as trustees for the public. While there is some discussion as to
whether directors are trustees in the strict legal sense, it is clear that they have significant
responsibilities that require them to be informed and diligent.

While directors may delegate certain duties to officers of the church, such as the treasurer or trustees,
the directors remain responsible for the actions of the officers pursuant to their fiduciary responsibilities.
It is important to understand that a board member or officer only has authority to act on the decisions
made by the governing board acting as a whole.

In the context of the church treasurer, their responsibilities and duties require board members to be
constantly aware of the financial position of the church and of the related decisions and actions. In
failing to be so informed, board members are not fulfilling their duties as fiduciaries.
(See Investing Church Funds – page 21)

b. Treasurer
Duties of a Treasurer should be specified in church constitutions/by-laws or in a separate policy
document and should, at a minimum include:
 fulfilling the financial policy mandated by the congregation through the church board
 taking the responsibility for keeping the books for the church with accuracy and integrity
 keeping the church board and trustees apprised of the current financial situation with regular
financial statements and any government changes that could affect the church operation.

When a Treasurer's term of office comes to an end, he should ensure that the new Treasurer is
familiarized with the methods of record keeping that are being used and the sources of information
(such as this manual) that are available to help with the task.

Issuing Cheques
It is wise to have two signatures on cheques to protect the church and its people from any
accusations of wrong-doing. It is also prudent to not include the pastor as a signing officer.
There should be sufficient signing officers listed with the bank to allow for adequate coverage
during holiday periods, illness, etc. Blank cheques should never be signed for any reason.

c. Trustees
Since an unincorporated church is not a person at law, it does not have the ability to own property in its
own name. Therefore, trustees are appointed on behalf of the church (a charitable trust) to hold land
and to do so on a perpetual succession basis, notwithstanding that individual trustees may come and
go. Church constitutions/by-laws should have a clause (or a resolution should be made) to state that
trustees are appointed on a perpetual succession basis. If this is not in place, mortgages, etc. may be
invalid and individual members may be liable.

Owners of land (in Ontario) need to be aware of the need to "deal" with land issues at least once every
40 years. Title could be lost to all or a portion of their land through errors in the conveyance of
adjoining property in relation to boundary descriptions, etc. or fraudulent conveyances.

Trustees are those who "hold in trust" all tangible assets of the church on behalf of the congregation
and are ultimately responsible for the financial activities of the church.
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 Trustees are:
 appointed by the congregation as signing officers of the church.
 to sign official documents as directed by the congregation or the board of the church.
 NOT a governing body and as such cannot refuse to sign on behalf of the congregation.
 mandated, upon closure of the church, to sell the assets of the church, pay all debts and
distribute the remainder according to the constitution. (Should there be any suit against the
church, the trustees are named as "holders in trust" of the church assets. It could be that their
own private assets may also be taken to settle the suit.)

When a church has become INCORPORATED,

directors become the governing body and also take on a role similar to trustees.

2. Financial Reporting
Every church needs to maintain adequate financial records to satisfy the requirements of being a
Registered Charity. Structure your records to make it easy to locate amounts that will be required for
T3010 reporting.

It is the responsibility of the treasurer to prepare monthly statements showing that the appropriate balance
is being maintained in each designated fund. Board members need to receive copies of these monthly
statements. Summary statements should also be provided periodically to the membership. Provide
comparisons of receipts to the budget to serve as a reminder to the membership of the needs of church
programs.

In addition to this minimum reporting, statistical information could be provided, such as contributions per
member and receipts versus pledges if a pledge system is used. Graphs comparing statistics from
previous years are helpful when considering future programs.

Year end financial statements should include a list of church assets. At least every 3 years, it is
recommended that there be an external audit.

3. Annual Budgets
Budgets are an aid to planning for the year ahead. There are basically two methods that charities use for
keeping financial records:

a. The designated or donor restricted fund system: Offering envelopes have designations for
general, missions, building, etc. funds. Money received for each of these designations must only be
used for that specific purpose. If one fund is short at some point, you may not transfer money or
"borrow" from any of the other funds to pay bills. You may make an appeal to the congregation as to
where the needs are and wait until money comes in for that designation. Your monthly statements
must reflect the true balances in each fund. (See Designated or Donor Restricted Funds, page 11)

b. The unified budget system: Offering envelopes do not have any designations. All money is received
into one overall account. The church board then budgets for general, missions, building, etc.
It is easier to cover expenses in this manner since items in a budget are only guideline amounts and do
not have to be strictly adhered to. On the other hand, it is often the case that revenues, particularly for
missions, may go down with this system. People like to give to specific people and projects and may
decide to support missions on their own, rather than let the church take on that responsibility.

It is also possible to use a combination of these two methods. If you are using the unified budget method
but have some specific short term project in mind (e.g. purchase of a new sound system) you may provide
envelopes marked for this purpose only, or ask donors to mark their envelopes. All funds received are kept
in a designated fund until dispersed for the specific purpose. The designated fund would then be closed.
(See “Types of Donations”, page 10)

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 A budget should be prepared prior to the beginning of each fiscal year by the church board or a budget
committee appointed by the church board. These budgets should be presented to the membership for
approval at an annual members meeting. Once they are approved, the responsibility for providing the
necessary funds rests with the membership. This approval authorizes the church board to act within the
budget. Should any substantial increase in operating expenses occur, the church board should seek
approval of the membership.

The budget should be the SERVANT of the church, not the MASTER.
A budget should be a dynamic document that empowers programs to achieve ministry results,
rather than a static document used to control spending. Preparing a budget should be a VISION
DRIVEN PROCESS supported by a STEWARDSHIP PROCESS. Stewardship is a discipleship
concept--learned behaviour, taught through instruction and leadership modeling.

4. Funding Commitment to the AGC

The By-Laws of the AGC outline a church's financial responsibility: It is the responsibility of every church to
contribute the percentage determined by National Conference of its previous year's general income
(exclusive of gifts designated for missions or capital) for the support of the offices, personnel and operation
of the AGC (2014 By-Law Section 5.9 9 (a)). A form entitled Partnership Payment Calculations (Appendix
st
A) is provided in December for making the calculations (expected return by February 1 ).

It is expected that each church will pay its yearly required Partnership Payment and ALSO endeavour to
contribute to AGC initiatives in church planting through the Church Planting Fund. Details are available from
the National Office.

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 REGISTERED CHARITY STATUS

1. Registration Criteria
A church should recognize the special privileges that are granted to them by the government. It is essential
that the requirements of the law be followed in order to maintain this registration.

a. The Capital Test

The financial support of the church should be sufficiently broad based to ensure that it can meet the
capital test of a charitable organization. Not more than 50% of its capital may be contributed by one
person or members of a group of persons who do not deal with each other at arm's length. Failure to
meet the capital test can result in being classified as a Private Foundation rather than a Registered
Charity. A Private Foundation may not issue official income tax receipts.

b. The Arm's Length Test

Since 1984, the Income Tax Act of Canada requires that more than 50% of the directors, trustees,
officers or like officials must deal with each other and with each of the other persons who hold such
positions at arm's length. Failure to meet the arm's length requirement can also result in being
classified as a Private Foundation.

c. Public vs. Private Benevolence Test

A church must devote its resources to charity and fulfil its statement of purpose. This includes paying a
pastoral staff, maintaining a place of worship, contributing to missions, etc.

One of the purposes for being a charity is to relieve poverty. A church operating a benevolent fund
should record the fact that it is considered part of the ministry either in a constitutional/by-law
document, or by specific approval appearing in the church board minutes. It is advisable for practical
reasons to have a written policy documenting the important aspects of the fund operation, such as
purpose, administrators, reporting responsibility, and authority and approval procedures/levels, etc.

The Public vs. Private Benevolence test is central to operating as a charity

and should be the guiding principle for all decisions.

The Income Tax Act requirements for considering an organization to have charitable status are as
follows;
 The organization's purposes must be exclusively and legally charitable
 It must be established for the benefit of the public or a sufficient segment of the public

2. Reporting Requirements
Each church must file one completed copy of T3010 (REGISTERED CHARITY INFORMATION RETURN)
no later than six months after the end of its fiscal year end without being asked to do so. This return must
include all relevant schedules of receipts, disbursements, assets and liability data. Financial statements
and a list of executive officers are also required. If funds are given to other Registered Charities (e.g.
missions, etc.), a list of qualified donees and their registration numbers is required. Failure to file can result
in revocation of the charity's registration. The checklist, form and accompanying documents are available
from the CRA website.

3. Becoming a Registered Charity

It is necessary for a church to be registered as a charity in order to have the legal right to give official
donation receipts. To apply for a registration number, form T2050, APPLICATION TO REGISTER A
CHARITY UNDER THE INCOME TAX ACT must be completed. Visit the CRA website for a registration
checklist, and to download the form. It must be made clear in a statement of purpose that the reason the
church exists is the advancement of religion.

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 A church exists to promote the spiritual teachings of a religious body (AGC) and maintain the doctrines and
spiritual observances on which those teachings are based. It must establish worship services and activities
that serve the public good and support the main purposes of the charity. If you wish, you may use a
qualified lawyer to review the responses on the forms.

A Letter of Affiliation from the AGC (the incorporated body) must accompany this application. When
approved by the CRA, a Notification of Registration will be received containing confirmation of the 9 digit
account number under which the Charity will operate. For more information contact your district taxation
office or the Charities Directorate, Canada Revenue Agency, Ottawa, ON K1A 0L5 1-800-267-2384

MAKING CHANGES?
If a change is made to the registered name of the church, the church’s fiscal year, address, etc.,
the CRA must be notified. Guidelines for this can be found on the CRA website.

4. Availability of Government Rebates

a. Goods & Services Tax/Harmonized Sales Tax (GST/HST) Rebate

Even though a charity is not registered for the GST/HST, it may still claim the charities' rebate for the
GST/HST paid for supplies and services, including reimbursements to an employee for employment
related mileage. For more information on how this applies to charities, see the CRA guide.

Rebates on GST/HST paid may be obtained by completing the online GST/HST return or by using form
GST66. These can be submitted every 6 months, but can include records going back 4 years if
necessary. Specific accounting must to be done for this purpose. Maintain a separate General Ledger
account for GST/HST amounts to simplify reporting.

b. Retail Sales Tax Rebates (Ontario)

Religious, charitable, and benevolent organizations in Ontario may be exempt from sales tax for certain
items. Forms may be obtained from a Retail Sales Tax office. Rebates of sales tax are available to
churches for certain limited items deemed to be for the exclusive use of "religion." This is a rather
complicated procedure and would best be performed by a reputable accounting firm. This provision
will prove especially useful during any building or renovation projects.

c. Federal Excise Gasoline Tax Refund Program

Gas Tax Rebates are available to charities who reimbursed employees or volunteers for their mileage
or the cost of the gasoline used in their operation in Canada. The refund may be claimed on form XE8.
This type of claim must be supported by expense accounts showing kilometres (excluding personal
use) and proof of payment to the employee or volunteer, and/or volume of litres purchased.

Take note of filing deadlines for;

GST rebates - 4 year filing deadline
Sales Tax rebates - 4 year filing deadline
Gasoline Tax refunds - 2 year filing deadline

5. Charging The Goods and Services Tax/Harmonized Sales Tax

Charities must register for GST/HST purposes only if they carry on taxable activities in excess of $50,000
per year and they have an annual gross revenue of more than $250,000. "Taxable activities" are defined
as the selling of new goods or receiving income from services. For more details on whether your church
should register, please see the CRA information document, GST/HST Info Sheet GI-067.

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The following are examples of goods and services that are exempt from charging GST/HST when
charities provide them:
 most services;
 supplies of used and donated goods;
 short-term residential accommodation (less than one month of occupancy);
 supplies of food or beverages to seniors, underprivileged individuals, or individuals with a
disability, under a program established and operated to provide prepared food to such
individuals in their places of residence. Any supply of food or beverages made to a charity
for these programs is also exempt from GST/HST;
 parking space rentals;
 facility rentals (e.g., halls for weddings); and
 catering services for private functions (e.g., wedding receptions)
 Day Care or Christian Day School fees
 Items made for sale at a fundraising activity (for a one time event)

If a church does register for GST/HST purposes, they commit to charging GST/HST for goods and/or
services sold and to remit it to the CRA. Bookkeeping will have to separate taxable income from ministry
income in order to complete form GST34 “Goods and Services Tax/Harmonized Sales Tax Return for
Registrants”, which will be sent to you when you are registered. Taxable activities are eligible for a 100%
rebate, which can be indicated on the GST/HST rebate form.

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 MINISTRY SUPPORT & RECEIPTING PRACTICES

1. Receiving Funds - with Integrity

Procedures need to be in place for the proper receiving and recording of offerings and other donations
made to the church. Responsible tellers need to be in place to handle the receipt of donations. It is wise to
have at least two tellers to count and sign for each weekly offering. Good record keeping will ensure that
verifiable charitable receipts can be issued.

Many churches are now using Pre-Authorized payments. For details on how to implement this program,
contact your local banking institution.

2. Income Tax Receipting Procedures

An official receipt is to be issued for bona fide gifts made to the church for its charitable activities during a
calendar year, ending December 31. The donor and eligible amount of any gift must be verifiable. (Loose
offerings, therefore do not apply.) The gift must also be for the charities own charitable purposes. An
eligible amount is one given without any expectation of a gift or service in return. For example, a cheque
made out to purchase an item at an auction is not eligible for a charitable receipt. The charity cannot
function as a conduit to issue receipts for other unregistered charities. Donations mailed to a charity are
considered to be dated according to the postal stamp appearing on them. Thus donations marked
December 31 but not received until later, still qualify for the previous calendar year.

Receipts must be dated within the taxation year and include the charity's business number, the donor's full
name and address and the website link for the CRA ( www.cra-arc.gc.ca/charities ). For a one-time gift, the
date that the gift was received must also be on the receipt. They should be mailed or delivered by February
28 of the following year. There should be three copies of each receipt - one copy for church records and
two copies for the donor.

Where a receipt is lost and a new one is issued by the charity, the replacement receipt must be clearly
identified as a replacement receipt and show the serial number of the one it replaces. Retain all copies of
any spoiled or cancelled receipts in your records. Do not attempt to correct any information regarding the
amount of the donation, the date received or the year for which it was issued.

A charity must create policies as to where and how its funds are to be used. Beware of "channelling"--
receiving gifts that expect a charitable receipt, but are for purposes that have not been adopted as church
policy. Such a contribution is not a gift for income tax purposes because the church does not acquire
control over the payment. The church would simply be acting as an agent for a private individual to pass on
a personal gift. Individuals requesting that gifts of a personal nature be given (such as a Christmas gift for a
pastor or a missionary) cannot receive a charitable receipt.

3. Types of Donations

a. Gifts in Kind
Official receipts may be issued for gifts in kind. It is the responsibility of the charity to establish the
value of the gift for receipting purposes. The value of the property must be determined by an
independent, competent appraiser. The name of the appraiser must be disclosed by the charity on
its official receipt. Service provided to a charity is not a gift and a receipt may not be issued for the
value of such services (e.g. a landscaper maintains the grounds of a church--he should be paid
for his service not issued a charitable receipt in lieu of payment).

b. Designated or Donor Restricted Gifts

Charities must use funds that have been designated to an approved fund for the intended purpose.
It is important that churches (especially unincorporated churches), remember that the church
board members are considered to be administrating a trust. They are obligated to maintain the
trust, or be personally liable if funds are misused in any way.

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 For example, money has been given to the building fund but summer offerings are low. Money is
borrowed from the building fund for operational expenses with the expectation that it will be repaid
when September or October offerings return to normal. This must not be done. Offerings
received in the fall are in reality new designations to general or building funds. Once money has
been transferred and used it is considered spent. The only way it can be replaced is by the board
members personally.

c. Benevolent Gifts
Donations may be received for a Benevolent Fund to provide charity to those in need. Tax receipts
should be given for contributions to the fund where possible. Follow procedures similar to those
for regular offerings.

The Income Tax Act requires that no part of the income of a charitable organization may be
available for the personal benefit of any member or trustee. However, this does not preclude a
church from providing reasonable financial assistance to a needy member, where provision of
such assistance to the needy in the community (i.e. members and non-members) is part of the
normal ministry of the church.

In the interest of confidentiality and practicality the Benevolent Fund may be the responsibility of
someone other than the church treasurer. Where this is the case it must be recognized that
although the fund is operated separately from other church operations, benevolence fund receipts
and disbursements form part of the church's activities and must be combined with other church
financial information on the T3010. Accordingly, the treasurer should have access to details of the
fund and should receive a confidential detailed report from the benevolent fund custodian at least
at each year end.

Benevolent Funds...
must be operated in a manner that ensures integrity in administration.
However, it should not overshadow the necessity for spiritual sensitivity and discernment
on the part of administrators

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 MINISTRY REMUNERATION & PAYROLL

Introduction
It is recommended that once a detailed Job Description (sample in Appendix B1) is established and
remuneration has been agreed upon by the church and the employee, a Letter of Understanding (sample,
Appendix B2) be prepared and signed. Each employee should be given an “Employee Handbook” (sample,
Appendix C1) and be asked to sign a “Standards of Employment” agreement (sample, Appendix C2).

1. Ministry Salary Components

a. Salary
Refer to the section Suggested Salary Schedule for AGC Pastors (Appendix B2) to aid in
determining an appropriate salary package for the circumstances of the church. Other employee
salaries can be based on wages paid for similar jobs in the community. For instance, the local
school board may offer a teacher’s salary scale based on education and years of experience that
would be comparable to a pastor’s salary. Holiday pay for statutory holidays is usually included in
salary, allowing for days off with pay. If someone does work on a designated holiday, a substitute
day is taken off instead. For part-time hourly rated employees, it must be noted that if a person
works their scheduled day before and after a holiday, they are entitled to be paid for the holiday.

b. Clergy Residence Deduction

Those employed as a member of the clergy, a member of a religious order or a regular minister of
a religious denomination, may claim a deduction for housing costs. (See Appendix B2 for AGC
definition of qualified individuals.) Therefore, a portion of salary may be designated as non-
taxable. This amount will be either one-third of the gross salary OR the fair market rental value of
the employee’s home, whichever is LESS, to a minimum yearly amount of $10,000. Electronic
filing of tax returns for persons claiming this deduction is NOT advisable. Individuals must
complete the “Clergy Residence Deduction” form T1223 and submit it with their income tax return.
The amount of salary that qualifies as a tax deduction is not subject to CPP, therefore a pastor’s
future pension income will be affected.

Whether an accommodation is owned by the church or by the individual, the Fair Market Rental
Value (excluding utilities) of that property must be determined, based on other similar properties in
the area. Care must be taken to periodically obtain an objective, written opinion of the rental value
of the home. A letter from a reputable real estate agent is recommended. CRA may request
information on the Fair Market Rental Value of a pastor’s home – have it on file! Update your
information every 2 years or if a significant market adjustment occurs.

Receiving the benefit – Those eligible to receive the CRD can claim it at the end of the year on
their tax return and receive a refund, OR they may request that their taxes be reduced on each pay
nd
throughout the year. If choosing the 2 option, follow the procedure outlined below in item “c”,
“Tax Reductions at Source”.

c. Tax Reductions at Source

The Income Tax Act provides that any person may request that Income tax be waived or reduced
when it can be shown that RRSP contributions, charitable donations, etc. are being made that will
be used as deductions to lower one's Taxable Income. You must also make this request if you
wish to have your clergy residence deduction applied to each pay. To qualify, the individual must
complete form T1213, “Request to reduce income tax deductions at Source”. A letter from the
employer is also required to verify income and employment status. You must receive confirmation
from the tax office that this request has been approved before reducing any payroll deductions. It
is recommended that this form and letter be sent well ahead of the start of the next calendar year.
For further information, contact your local tax office.

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 d. Automobile and Travel Allowances
The Income Tax Act provides for payment of a reasonable allowance to pastors for travel costs
incurred in the performance of their duties. An allowance is considered reasonable, and thus tax-
free, if it is based on actual kilometres driven in the course of ministry duties. The per kilometre
rate to be used must reflect the actual cost of owning and operating a particular automobile. An
accurate log book must be maintained to verify any reimbursement. The CRA has prescribed per
kilometre rates that vary from province to province. These rates are listed on the CRA website.
Charities would be wise to not exceed these rates and thus avoid any challenge from the CRA.

Other points to consider:

 Encourage the pastor to document, for review on request, all employment trips taken,
distances involved with “beginning” and “end” odometer reading, and details of individuals
visited (Appendix B3). A monthly Expense Report can then be submitted for
reimbursement (Appendix B4).
 All personal travel, including travel from the place of residence to the office, is specifically
excluded for reimbursement. Nevertheless, personal mileage should be accounted for in
order that a complete record is available.
 Other costs such as meals, parking and toll charges can be reimbursed if they are
incurred in connection with employment duties.
 Use of a single rate per kilometre for the entire year will perhaps be easier as long as it
does not result in reimbursement that is more than the actual rate of operating a particular
automobile.
 An employer may wish to make monthly travel advances to the employee for their
expenses. This is an acceptable practice provided there is an annual determination of an
appropriate kilometre-based allowance and there is an accounting at the end of the year
(approximately October) to reconcile the advances with the permitted allowance.

If the allowance paid to an employee is significantly less than the ministry-related automobile
expenses, they may claim a deduction for the actual expenses incurred in connection with the
ownership and operation of their vehicle for ministry use. To claim these expenses, T2200 -
DECLARATION OF CONDITIONS OF EMPLOYMENT, needs to be completed each year by the
employer verifying the individual's need to use a vehicle for employment and the amount of any
allowance received for mileage. The individual also needs to complete form T777 - STATEMENT
OF EMPLOYMENT EXPENSES to accompany their Income Tax return.

Monthly submission of a pastor's travel claim for review and approval by an appropriate official in
the church is not only good practice in accountability on the part of the pastor, but the existence of
a regular review and approval process would be a significant factor in satisfying the CRA in the
event of a review.

2. Employee Benefits / Ministry Related Expenses

a. AGC Group Insurance

All full time employees (working 24 hours or more per week) of any AGC church, day-care, school,
camp, etc. are eligible to be members of the Group Insurance Plan. New employees must be
enrolled in the plan within the first 3 months of starting employment. There are penalties for late
applicants. Benefits commence 3 months after the date of employment so long as the application
has been made within that period. Premiums are billed to the church every month.

A pastoral change is an opportunity to join the plan. Current rates and application forms can be
found on the AGC website. This plan offers coverage for: Life Insurance ($50,000), Accidental
Death & Dismemberment, Dependant Life, Health, Dental, Vision, Out of Country Travel and Long
Term Disability (LTD).

It is required that an employee pay the LTD portion of the premiums himself, generally by a payroll
deduction. In the event that the employee has to collect LTD he will then do so tax free. Records
must substantiate this payment. If claimed, LTD payments would be equal to 2/3 of the employee's
current salary.

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 To terminate benefits, the AGC office must be given prior notification of the termination date.
Benefits can be extended under certain conditions – contact the AGC office before offering any
extended coverage to an employee as a part of a severance, retirement or appreciation package.

Life Insurance and Accidental Death & Dismemberment Premiums are Taxable Benefits. Since
the AGC plan includes both, the premiums paid for this portion of the plan are to be included on
the T4 in the employee's gross salary (Box 14) and also indicated as Code 40 in the Other
Information area. A notice will be sent out each year from the National Office to inform Treasurers
of this amount. Only this part of the premium is considered a taxable benefit. No other part is to
be included in gross salary. If the employee is paying the Life Insurance and AD&D Premium
themselves, it is not a taxable benefit.

b. Pension/RRSP
The AGC Group RRSP Plan is provided by SunLife. More details are available on the website.
This plan is a matching plan, with the employer matching contributions by the employee up to a
pre-determined amount. The amount that the employer contributes is considered a taxable
benefit, and is included in Box 14 on the employee’s T4, and also indicated as Code 40 in the
Other Information area of the T4.

c. Gifts Related to Employment

Employment income includes "gratuities" and "benefits of any kind" which are related to
employment. Any other bonus or gift given out of funds under the control of the church should be
included in the individual's income for tax purposes. This includes Christmas gifts and end of the
year bonuses. An employer can give up to two non-monetary gifts that are not easily converted to
cash to an employee in a year as long as their combined value does not exceed $500.00. If a
monetary gift or bonus is given, it either must be included as taxable income, and appropriate
deductions taken, or the employee must report it as “other income” on their income tax return.
A gift to an employee’s spouse is just the same as a gift to an employee, as it would be deemed to
be a gift “by virtue of the office of employment”, and would also be considered taxable income.

At Christmas time (or for other special occasions such as an Anniversary), some churches collect
personal gifts from individual members of the congregation for their pastors. The amount
collected is given directly to the pastor. The amount is not included in the income or expenses of
the church, and donors do not receive tax receipts for such gifts. It should not be collected along
with the regular church offering. The pastor must report a gift of this nature as “other income”.

d. Benefit from Financing

When an employer makes a loan to an employee and charges no interest or interest at a rate
which is less than the rate that would have been charged if the employee had borrowed the money
from an arm's length lender (i.e. a bank or trust company), the employee is receiving a taxable
benefit.

If it is a personal loan, interest on the outstanding balance must be calculated by using the
quarterly prescribed rate established by the CRA. This is the same rate used for deficient tax
payments or overpaid taxes. If the loan is for a home purchase, the taxable benefit is based on
the prescribed rate of interest at the time the loan is made and remains the same for the year.

e. Book/Education Allowances
Members of the clergy are not permitted to deduct the cost of books used in their jobs. However,
book allowances, retreat or conference fees, etc. may be provided from an established fund
authorized by the church board. The pastor could purchase his or her own books and claim
reimbursement from this fund. This in effect allows them to receive these items as tax-free
benefits. Care should be exercised that such expenditures are of benefit to the church.

f. Other Employment-related Income

Pastors may receive honoraria for performing weddings, funerals, or casual speaking
engagements outside their regular ministry. Under these circumstances, the individual has
received income outside the employer-employee relationship and it is not reported as income from
the church. It is however the responsibility of the pastor to report such honoraria as business
income when he completes his income tax return.
14
 g. Moving Expenses
When an employer pays the reasonable moving costs of an employee, the amount is not treated
as a taxable benefit to the employee, and no amount is deductible by the employee in respect to
the reimbursed costs. If no moving expenses are paid, the individual may claim for expenses on
his tax return for moves within Canada only.

h. Holiday Trips
When a church pays for a vacation for an employee and/or his family, the costs are a taxable
benefit for the employee. In the situation where the employee's presence is required for business
purposes (e.g. National or Regional Conferences), reasonable expenditures for such a trip are not
a taxable benefit. However, when such a business trip is extended to included further holiday time,
costs related to the extension become a taxable benefit.

i. Tuition Fees
Where an employer has paid tuition fees on behalf of an employee or has reimbursed an
employee, in whole or in part, for tuition fees paid by the employee personally, the amount paid
should be reported as income for the employee. If the employee does not receive reimbursement,
the costs of most educational courses are eligible for tax credits on an individual's tax return.

3. Payroll Reporting Requirements

a. General Principles
All employers must register with the CRA for the purpose of submitting Income Tax, Employment
Insurance contributions and Canada Pension Plan deductions to the government. When
registered, the employer will be assigned a Business Number (BN) that will be indicated on all
submission forms and T4 summaries, etc.

An employer should maintain a Payroll Register, detailing all deductions subtracted from
employees' wages and the amounts of EI and CPP that are required from the employer. While the
Payroll Deductions Tables are still available on the CRA website, most employers are now using
the online Payroll Deductions Calculator. Every employee should receive with their net pay a
Statement of Earnings and Deductions as recorded in the Register.

b. TD1 - Personal Tax Credit Return

These forms should be completed by each employee, preferably in January of each year to
coincide with the taxation year. It is important to do this yearly as basic personal tax amounts and
other regulations are constantly changing. The TD1 should also be revised when any status
change occurs such as marriage, number of dependents, age, etc. The "Net Claim Code"
obtained from the TD1 allows the employer to determine the tax bracket to be used for Income Tax
deductions.

c. RC107 - Source Deductions Remittance

This form is to be filed with the CRA by the 15th of each month for the previous month. The
remittance includes the employee deductions of Income Tax, EI, and CPP plus the employer
portion of EI and CPP. Employer CPP matches the amount paid by the employee. Employer EI is
calculated by multiplying the employee amount by 1.4. If the average monthly remittance is
greater than $15,000., an employer is required to pay deductions more than once per month.

d. T4s Be sure to read the CRA guides for more complete explanations and yearly changes.
The T4 form is required to be prepared and submitted with a summary to the CRA by February 28.
Employees will also expect to receive their copies as early as possible. Obtain all necessary
forms from the CRA well in advance to complete this task on time. (Quebec residents should
obtain Revélé forms from Revenu Quebec as well.)

15
 A payroll register should be kept with amounts for each employee for Gross Income, Income Tax,
EI, CPP or QPP, and HSF (Quebec). EI Insurable Earnings and CPP Pensionable Earnings must
be determined. These will be different from the Employment Income if the maximum insurable
earnings amount was surpassed. CPP Pensionable Earnings may also differ if the clergy
residence deduction applies. These amounts should be totalled at the end of the year and
compared to the amounts submitted monthly on RC107 - Source Deduction Remittance.
Reconciling these amounts in November can help avoid surprises at the end of the year that could
delay your T4 preparation.

e. Employer Health Tax

In Ontario, registered charities are exempt from this tax. If outside of Ontario, check with your
regional tax office for similar tax situations.

WHICH SALARY ELEMENTS ARE SUBJECT TO DEDUCTIONS?

Income Tax CPP EI

Salary (minus CRD)   

Car Allowance (where there is no   

separate accounting)

Clergy Residence Deduction 

Bonuses or Gifts   

RRSP Contributions   

Low Interest loans  

Life Insurance premiums  

Accidental Death & Dismemberment  
premiums

Pay in lieu of termination notice   

Retiring allowances 

Deductions are indicated with  marks.

16
 EMPLOYMENT ISSUES

Concluding Employment

1. General Principles
Either party may terminate the employment contract by either: (1) complying with the notice provisions in a
written employment contract; or (2) by giving notice, based on minimum periods of employee service
required by provincial statute. If there is no contractual or provincial requirement, provide "reasonable
notice" based on such common factors as: length of service, position, education, prior experience, salary,
responsibilities, degree of specialization, age, and hours of work.

An employer may terminate an employee for "just and reasonable cause". This would involve an alleged
breach of a term or condition of employment. In such a case, there is no requirement to give "reasonable
notice". Termination may be immediate. However, the burden of proving just and reasonable cause to
terminate lies with the employer. If the subject matter of the termination is very serious, no previous
warning is necessary. If the subject matter is work performance or a less serious problem, a clear, prior
warning is usually necessary to support termination for "just and reasonable cause". Wrongful dismissal
occurs when an employee is dismissed without "just and reasonable cause" and without "reasonable
notice" or "pay in lieu" thereof. When employees are wrongfully dismissed, they have a legal right to sue.
Charities are not exempt from wrongful dismissal lawsuits.

2. Involuntary Termination
An employer can terminate an employee at any time. However, under Section 57 of the Ontario
Employment Standards Act, employers are required to give the employee written notice of termination--one
week of notice for each year worked up to a maximum of eight weeks. Check with other provincial tax
offices for a listing of the required notice in relation to the length of service. It is important to recognize that
provincial statutory standards for notice are generally minimum requirements which may fall short of
requirements that have been established in common law. Accordingly, the other factors outlined under
"General Principles" should also be considered. Regular wages and benefits are continued during this
period while the employee continues to work. If notice is not given, the employee should get termination
pay instead (also called "pay-in-lieu of notice"). In this case wages should be provided that cover the period
of notice that the employer was supposed to give the employee. Group Insurance and LTD benefits would
not apply.

3. Voluntary Termination
If a pastor chooses to leave voluntarily, the employer's only obligations to the pastor are the payment of
remuneration to the date of termination and the payment of any vacation pay entitlement as at the date of
termination. A congregation may wish to provide additional funds to the pastor (even though there is no
legal requirement to do so) as a token of appreciation. It is not advisable to provide such amounts through
the church treasury as there is a question whether the related payments represent expenditures for
charitable purposes. The appropriate response is to collect such amounts outside of the church treasury
with no receipts given. Such gifts would not be taxable in the hands of the terminating pastor.

4. Severance Packages
If a church chooses to negotiate a Severance Package with an outgoing employee, it would be wise to first
consult a lawyer, or the AGC, or the Canadian Council of Christian Charities to determine any legal
obligations. It is imperative at the conclusion of negotiations and the acceptance of the package by both
parties that the employee sign a full and final release. (sample, Appendix C3)

5. Retiring Allowances
Upon retirement or in connection with loss of office, a retiring allowance may be given to an employee. An
allowance such as this is subject to income tax. Alternatively, an employer can transfer a retiring allowance
directly to an employee's RRSP account, which is not taxable, however there are limits as to the amount of
such an allowance based on the number of years that the employee was employed. Check with your local
tax office for current limits. It should not exceed the employee's allowable contribution. T4A forms are
used to report retiring allowances.

17
6. Reporting Requirements
An employer must complete a (ROE) Record of Employment form, available from Human Resources
Canada, when an employee stops working in insurable employment within five (5) calendar days of an
employee's interruption of earnings. This form is only available in hard copy format, so it is advisable to
order these ahead and have some on hand. The ROE is used to determine whether the person qualifies
for EI benefits, what the benefit rate should be and how long the person is eligible for these benefits. An
“EMPLOYER GUIDE - How to complete the Record of Employment” is available to explain how to complete
the ROE, but please be aware of the following, in the case of a pastor:

Pastors and EI Benefits: When and How is Eligibility Established?

Limitations on eligibility for benefits introduced into the Unemployment Insurance Act in 1993 may result in
the denial of benefits in many instances where an employee resigns. If "just cause" for voluntarily leaving a
job can be established, a claimant would not be denied benefits. A number of conditions are listed in
Subsection 29(c) of the Act which are termed "just cause" for voluntarily leaving an employment;
Excerpt from the Unemployment Insurance Act:
29 (c) just cause for voluntarily leaving an employment or taking leave from an employment exists if the
claimant had no reasonable alternative to leaving or taking leave, having regard to all the
circumstances, including any of the following:
(i) sexual or other harassment,
(ii) obligation to accompany a spouse, common-law partner or dependent child to another residence,
(iii) discrimination on a prohibited ground of discrimination within the meaning of the Canadian Human
Rights Act,
(iv) working conditions that constitute a danger to health or safety,
(v) obligation to care for a child or a member of the immediate family,
(vi) reasonable assurance of another employment in the immediate future,
(vii) significant modification of terms and conditions respecting wages or salary,
(viii) excessive overtime work or refusal to pay for overtime work,
(ix) significant changes in work duties,
(x) antagonism with a supervisor if the claimant is not primarily responsible for the antagonism,
(xi) practices of an employer that are contrary to law,
(xii) discrimination with regard to employment because of membership in an association,
organization or union of workers,
(xiii) undue pressure by an employer on the claimant to leave their employment, and
(xiv) any other reasonable circumstances that are prescribed.

Since it is customary for a pastor to tender his resignation, whether or not such resignation is voluntary in
the particular circumstances, it is important to know which circumstances would qualify, or be interpreted,
as "just cause". The following are some reasons provided on the ROE by various denominations for
conditions that could lead to resignation:
1. poor performance
2. loss of confidence by the congregation and/or leadership
3. failure to meet expectations of congregation
4. immoral/unethical conduct, i.e moral failure
5. criminal behaviour
6. teaching "false" doctrine
7. financial distress of employer
8. not suited for ministry
9. mental/physical exhaustion/instability, i.e. burn-out
10. personal conviction that ministry has come to an end

It would seem prudent for any employee facing, or contemplating, a "resignation" from employment to ask
the employer what reason will be given on the Record of Employment form. The employee will thus have
the opportunity to influence how the reason for separation is stated.

18
 OTHER MATTERS

1. Church Insurance
Churches have unique insurance requirements. Not only is there coverage required for the building and
contents, but other specialized items need to be included, such as personal injury (i.e. libel, slander and
defamation of character), sexual abuse and harassment, the pastor's library, use of church-owned vehicles,
etc.

Directors and Officers Liability Insurance is a necessary addition to coverage. It provides personal protection
for officers and coverage for defence costs associated with suits arising from discriminatory practises,
wrongful dismissal or disciplinary actions, financial mismanagement or misuse of designated funds.

Churches often provide non-professional counselling as part of their ministries and should have insurance
coverage to protect their pastors, elders, youth leaders, volunteer counsellors, etc. A good policy will be
specific about counsellors' malpractice coverage.

Please note: In conjunction with an insurance policy, it is necessary for each church to have Abuse policies
in place. It is also important that church leadership take steps to ensure that the policy is implemented and
the appropriate education about the policy is undertaken so that the policies simply do not collect dust. We
recommend “Plan to Protect” from Winning Kids Inc.

2. Facility Use Policy

Churches are often asked to rent their facilities to various groups in the community--a congregation without
their own facilities, sports associations, service clubs, day cares, or various groups that may want to use
gym facilities, couples needing a place for a wedding. If a church decides to allow the rental or use of their
facilities by an outside group, organization or individual, it is extremely important to transfer the responsibility
for legal liability to the tenant and to verify that the tenant has the resources to back up this responsibility.
The development of a Facility Use Policy can be a discipleship opportunity for the entire church. As
Christian ministries reflect on marriage in particular it is an opportunity to reflect on the mission of your
church, and how that mission can be accomplished today. Developing policy in a Christian context can
begin with study of the Bible, doctrinal statements and the mission/vision statements of your church. The
process can help staff and members to reflect on how to enable the message and work of your ministry.
Because human sexuality issues can bring about great controversy, and could raise issues of
discrimination, policies will be more effective if they are integrated, enforceable, fully authorized and widely
known:
 Integrated : Wherever possible, these policies should refer to the organization’s foundational
documents, including Constitution or By-laws and Statement of Faith.
 Enforceable: Policies, if they are to afford any protection at all, must be developed such that they will
not be applied in a discriminatory fashion. If a congregation turns a blind eye to one kind of policy
infraction, but rigidly enforces another, they are likely to find trouble.
 Fully authorized: New policies should be ratified by the membership of the church, according to its
established procedures and Constitution.
 Widely known: Facility Use policies should be included in initial contact with potential users.

(The above information is provided by the Evangelical Fellowship of Canada)

19
3. Marriage Policies
All policy must support ministry, not prevent it. A Marriage policy should be:
 Positive: The policy should not be arbitrarily exclusionary; instead it should be a statement which
reflects the goodness of the institution of marriage as God has established it. Secondly, the policy
should be comprehensive, clearly stating what marriage is. A statement excluding homosexuals may
address one concern, but will not be sufficient should other forms of “marriage” be created in the
future.
 Comprehensive: Ideally a church will create an integrated policy that spells out its theology and policy
around a broad range of marital issues--including common law relationships, marriage preparation,
divorce and remarriage, interfaith marriage, and so on. Such an action will result in a more balanced
and consistent approach to all these issues.

After examining this issue fully your church will determine what policy elements will be needed for your
organization, for example:
 Do you need to update employee or member lifestyle or “ethos” statements?
 Do you rent your facilities for weddings or receptions?
 Does your staff have responsibilities for solemnizing marriages?
 Do you provide marital or premarital counseling?
Your policy must reflect a commitment to the identity and outreach of your church. We provide the following
three statements as starting points for framing your policies. Once again, we must point out that the
contents of this page are for information only, and are no substitute for legal advice. Think critically
and carefully about what your policies must contain.
 Definition of Marriage: We resolve that as a matter of belief, doctrine and religious practice, our
congregation reserves the term “marriage” for the covenant relationship between one man and one
woman to the exclusion of all others.
 Staff Participation in the Solemnization and Celebration of Marriage: We resolve that members of
our pastoral staff will be allowed to arrange for, officiate at or take part in the solemnization or
celebration of a marriage only when it conforms to our congregational statement on marriage.
 Use of Facilities: This congregation reserves the right to rent or allow use of these premises only by
individuals or groups not incompatible with our goals, values and statements and for purposes which
are not incompatible with our goals, values and statements.

Note: A more cautious approach would be to restrict the use of facilities to activities initiated by the
leadership, and organized by members which correspond to the [charitable] objects of the church. However
many churches do wish to make their facilities available to the community for some activities. This requires
a much more nuanced policy, and increases the chance that discrimination may be alleged.
(The above information is provided by the Evangelical Fellowship of Canada)

4. The Church Copyright Licence (CCLI)

The CCLI allows for the use of copyrighted songs without violating the federal copyright law. This includes
printing songs on bulletins, songsheets, powerpoint slides or song books. It also covers recording worship
services. CCLI also provides a license for movies or videos. There is an annual fee for the licence based
on the size of the church. Every 2 ½ years each licence holder is asked to complete a report of music used
within a specified time period. Complete records of materials being used should be kept in order to simplify
this reporting. Remember to indicate the licence number on all types of prepared materials.

5. CD Levy
Churches that purchase 1000 or more CDs per year should register with the Canadian Private Copying
Collective (416) 486-6839, to avoid paying a levy.

6. Use of T4As and T5s

T4As are statements of Pension, Retirement, Annuity and other Income and may be applicable if an
employee is given a retiring allowance. If Scholarships have been given to individuals they also must
receive a T4A. If a church has raised money through the use of bonds or loans from church members, any
interest paid to them must be reported as Interest Income on the T5. Copies of all T4As and T5s must be
returned with Summaries to the CRA by February 28.

20
7. Records Retention
Financial records for businesses and charities must be retained for 7 years and be available at any time for
a CRA audit. They are never to be disposed of sooner without written permission from the government.
Keep good, complete records. Document and date everything. Records from a church that closes must
be kept on file at the office of the AGC.

8. Investing Church Funds

All charities have a duty to see to it that all of their resources are efficiently and productively used in pursuit
of their charitable objects. The Trustee Act of Ontario lists some mandatory criteria that follow the "prudent
investor" rule. Other provinces have or are considering similar legislation outlining charitable investing
procedures. These seven mandatory criteria are:
 General economic conditions;
 The possible effect of inflation or deflation;
 The expected tax consequences of investment decisions or strategies;
 The role that each investment or course of action plays within the overall investment portfolio;
 The expected total return from income and the appreciation of capital;
 Needs for liquidity, regularity of income, and preservation or appreciation of capital, and
 An asset's special relationship or special value, if any, to the purposes of the charity or to one
or more of the beneficiaries.

Each of these criteria must receive the same degree of consideration when choosing an investment.
In addition, because churches have the advancement of religion as their purpose for being a charity,
morals and ethics may not be ignored in any financial activity or decision. Since there are now very
clear investment rules laid out, charities are open to challenge from any member of the public
regarding the suitability of investment decisions. To safeguard boards and officers of charities, it is
wise practise to take the following steps:

a. Appoint an investment committee including board members and members of management.

b. The investment committee should be empowered and required to retain a qualified investment
advisor. This person must have an understanding of laws governing charities and trusts and be
able to advise the organization on appropriate policies.
c. With input from the investment adviser, the committee should develop an investment policy which
reflects each of the seven mandatory investment criteria. Such a policy also should address non-
financial concerns such as ethical or moral investment criteria. (The policy should indicate that
the application of ethical or moral investment criteria to restrict investments should not be taken
as authority to accept an investment portfolio mix which results in materially inferior investment
returns.)
d. The investment committee should select an investment manager, i.e. a broker or appropriate
financial institution, to take care of the actual investment activities and to report the results to the
investment committee and its investment adviser in an agreed upon format and on an agreed
upon periodic basis.

21
 - Appendix “A” -
ASSOCIATED GOSPEL CHURCHES
GUIDE to the CALCULATION OF PARTNERSHIP PAYMENTS
Thank you for your ongoing support of the AGC through your "Partnership Payments"! We
deeply appreciate your participation! It is our lifeline to service the churches through the
President, the Superintendents and office staff. The AGC By-laws delineate the guidelines as
follows:

It is the responsibility of every church to contribute the percentage determined by National Conference, of
its previous year's general income (exclusive of gifts designated for missions or capital) for the support of
the offices, personnel and operation of the AGC (2013 By-laws pg 7, Section 5.9.1)

Partnership Payments are based on "previous year’s general income."

"Previous year" refers to your church’s last complete fiscal year.

DEFINITION OF TERMS

Income
All revenue obtained through weekly offerings, bequests, interest on investments or other general
donations.

Mission Donations
1. "AGC Projects": all gifts sent to the AGC office for specific church plants or projects.

2. “National Church Planting Fund”: all contributions sent to the AGC Office for the AGC
National Church Planting Fund.

3. "Other Missions": all gifts sent to duly recognized mission agencies (both foreign and
domestic).

PLEASE NOTE: Previous Partnership Payments are NOT to be entered as mission donations.

Capital Donations
1. "Building Fund": all gifts received for the purchase of real property such as new
buildings, additions, mortgage principal and interest, or manse. (General repairs to
existing buildings are not to be included.)

2. "Other Capital Donations": all gifts received for the purchase or replacement of musical
instruments, sound equipment or other major equipment that become assets of the
church.

Percentage used to calculate payment:

4% was designated to be the rate of payment by a vote of National Conference, June, 1978. The
AGC National Board voted in February 2010 to institute a pro-rated partnership plan for churches
with income above $500,000, effective January 1, 2011.

For additional clarification, contact: AGC National Office (905) 634-8184 [email protected]

Once again, please accept our appreciation as we seek to partner together!

22
 ASSOCIATED GOSPEL CHURCHES
PARTNERSHIP PAYMENT CALCULATIONS 2015
Based on your last fiscal year
Refer to the GUIDE sheet for clarification of terms used below.

Total Income $ _____________(a)

3) Other Missions $ _____________(d)
Mission Donations:
1) AGC Projects $ _____________(b)
Capital Donations:
2) Nat’l Church Planting Fund $_________ (c)
1) Building Fund $ _____________(e)
2) Other $ _____________(f)

Total Donation Deductions:

(b) + (c) + (d) + (e) + (f) = $ _____________(g)

Total BASE for Partnership Payments: [(a) minus (g)] $ _____________(h)

If (h) is $500,000 or LESS, please go to Box 1 below
If (h) is above $500,000, please go to Box 2 below

Box 1
4% of BASE (g) above $ _____________(i) This is your total partnership payment for 2015

Box 2
4% of first $500,000 of BASE : $ ________________ (1)
3% of additional BASE amount from $500,000 to $999,999: _____________ (2)
2% of additional BASE amount from $1,000,000 to $1,499,999: _____________ (3)
1% of additional BASE amount from $1,500,000 and above: _____________ (4)

ADD 1, 2, 3 and 4 $______________(i) This is your total partnership payment for 2015

AGC National Church Planting Support: $______________(j) Suggestion of 20% of (i) as

your 2015 Church Planting Contribution.

Church Name_________________________________ City____________________________

Treasurer/Contact Person for Financial Matters ______________________________________
Phone: _________________________ E-mail : _____________________________________
Your Fiscal Year commencement date: ___ /____ / ___ (mm/dd/yy)
Total Partnership Payment for 2015 will be [amount (i) above]; $____________________
Total Church Planting support for 2015 will be [amount (j) above]; $____________________
Payments can be made monthly, quarterly or yearly. Pre-authorized payment is preferred.

Please return to the Associated Gospel Churches, 1500 Kerns Rd., Burlington, ON, L7P 3A7
or Fax to 905-634-6283 or e-mail the info to [email protected]
PLEASE RETURN BY FEBRUARY 1, 2015
23
 Appendix B

1. Suggested Job Description for Senior Pastor

2. Suggested Salary Schedule

3. Ministry Travel Expense Record

4. Travel and Expense Record

 - Appendix B1 -
ASSOCIATED GOSPEL CHURCHES
Suggested Job Description Outline for a Senior Pastor

Date to Review
this Job Description: ___________________________

Date Revised: ___________________________

Purpose: To provide spiritual oversight, vision and leadership to assist in developing a healthy
reproducing church.

Leadership Profile:

The Pastor will:

1. have a personal commitment to Jesus Christ which he clearly articulates, submitting to Holy
Scripture as his authority for faith and life,
2. have ministry experience which has clearly evidenced the blessing of the Holy Spirit,
3. subscribe whole-heartedly to the Articles of Faith and Doctrine, mission and policies of the
Associated Gospel Churches and have achieved appropriate Doctrine and Credentials approval,
4. be able to communicate his vision, work well with his fellow church leaders and apply the Word of
God to all areas of life and the church’s ministry,
5. (Add additional items to suit your own situation)
6.
7.

Areas of Responsibility: % of Time

1. Have a balanced dynamic preaching/teaching ministry. 35%

(Provide your own description here)

2. Provide proactive leadership and leadership training. 15%

(Provide your own description here)

3. Provide pastoral care personally and through other trained 15%

care-givers.

(Provide your own description here)

4. Disciple and equip others to do the same. 10%

(Provide your own description here)

5. Provide administrative management in operations 15%

(Provide your own description here)

6. Continue in his self-development to remain current 10%
and effective in ministry.

(Provide your own description here)

Organizational Relationships:

1. The pastor is directly responsible to the elders and indirectly responsible to the congregation of
the church.

2. The pastor is responsible for the leadership of any support staff.

 SUGGESTED SALARY SCHEDULE FOR AGC PASTORS - Appendix B2 -

Guiding Principles:
1 Corinthians 9:14: In the same way, the Lord has commanded that those who preach the gospel
should receive their living from the gospel.
1 Timothy 5:17: The elders who direct the affairs of the church well are worthy of double honor,
especially those whose work is preaching and teaching.
Hebrews 13:17: Have confidence in your leaders and submit to their authority, because they keep
watch over you as those who must give an account. Do this so that their work will be a joy, not a
burden, for that would be of no benefit to you.

Components of a Compensation Package

A compensation package should comprise some or all of the following:
 Reimbursement for services (salary),
 Medical insurance premium payments (all or in part).
 RRSP payments or similar pension arrangements,
 Book allowance
 Continuing education grant.
 Automobile Expenses
Vacation time and days off should also be stipulated in the total package.

Clergy Residence Deduction

A portion of a pastors salary is considered to be non-taxable through the Clergy Residence Deduction
(CRD) so long as they meet the requirements as either a member of the clergy or a regular minister
(for a description of these requirements, see Appendix 1). At the present time the Canada Revenue
Agency (CRA) allows for an amount which represents the lesser of either the fair market rental value
for the home in which the person resides OR 1/3 of the person’s salary. This amount is included on the
T4 and in total salary for the calculation of LTD benefits.

Medical Insurance
The AGC office will supply information concerning the group medical and insurance coverage offered
to pastors and other church workers. For new employees, the waiting period for benefits to commence
is 3 months. The enrolment form must be received in the AGC office before the end of the 3 month
waiting period. Your staff will greatly appreciate this provision, which includes Long Term Disability
(LTD) coverage. LTD benefits will protect the church from having to pay salary for an extended period
of time for a staff member with long term health difficulties.

RRSP/Pension
The AGC offers a Group RRSP plan through SunLife. Churches are encouraged to provide this benefit
to their pastors. This can be a contribution on a matching basis, based on a percentage of salary. For
details, contact the AGC office.

Book Allowance
This amount should reflect the anticipated expenses for the Pastor to keep his library current.

Continuing Education Grant

A budgeted amount for attendance at professional seminars/conferences and participation in
continuing education courses will undoubtedly benefit the pastor’s ministry to the church. (AGC
Conferences should not be included in this amount, these Conferences should be a part of the church
ministry budget)

Automobile expenses are best reimbursed to the pastor on a per kilometre basis, when his car is
used for church business only. A log should be kept in the automobile to register all business travel
kms. It is important to note that travel from his home to the church office is not considered business
travel. The church's annual budget will provide for the pastor's car expenses and he ought to keep
within this allotment. If the church is not reimbursing the pastor for mileage, a T2200 should be filled
out for the pastor so that he can claim his mileage on his income tax return.
 A SUGGESTED LETTER OF UNDERSTANDING

The following is a suggestion for formulating a contract with pastoral staff. Some items are standard
items and others may be added as negotiable extra benefits. Not every item included here will be
acceptable to every church; each should feel free to use what they find appropriate to their situation.

This suggested contract includes both a sample clause and comments or guidelines for alternatives. The
comments or guidelines are included in italics.
Similar contracts should be in place for all church employees.

A LETTER OF UNDERSTANDING

__________________________(Pastor) and ______________________ (Church) agree to the following:

II. STANDARD ITEMS

1. Term:
This Letter of Understanding covers a term beginning _________ and ending _____________.

2. Salary:
The church shall provide the pastor with an annual gross salary of $______________.
This salary could be increased be a specified percentage over the years in the term of the contract or
possible salary increases could be discussed annually, following an evaluation review.
3. Government Deductions:
All required deductions will be made according to law.

4. Health, Life and Long Term Disability Insurance Plan:

The church agrees to participate in the group plan of the Associated Gospel Churches. The pastor will
be responsible for paying the LTD premium.

5. Clergy Residence Deduction

The church agrees to follow proper procedures to allow for the clergy residence deduction, as per the
request of the pastor, but only where the proper AGC credentialing requirements are met.

6. Car Allowance:
The church agrees to include $____________ in the gross salary for car maintenance.

7. Travel Allowance:
Gas expenses for local church-related travel will be reimbursed upon presentation of receipts on a
basis of ¢___ per km to a maximum of $________ per year. In addition, the pastor will be reimbursed
for travel to Regional and National AGC Conference sessions.
The church may then apply for a refund of Federal Excise Tax on gasoline. Include EITHER #5 or #6: #6 is the
preferred method of providing for travel expenses.

8. Office Expenses:
The church will provide adequate office equipment and furniture, and pay the expenses of operating
the church office, such as stationary, postage, telephone, duplicating, and other supplies.
Secretarial help may be provided on a permanent or volunteer basis as circumstances permit.

9. Vacation and Other Absences

The pastor will be given one full day off per week, plus a vacation of _____ weeks and all regular
statutory holidays. Attendance at Conferences of those organizations with which the church has
affiliation will NOT be considered as vacation.
Guidelines for other absences to be detailed in this section could include: illness, personal days, bereavement,
pregnancy/parental leave.
III. NEGOTIABLE ITEMS

1. Professional Growth:
The congregation will provide a fund of a maximum of $________ annually for the pastor to attend
professional development seminars, conferences and courses. Any unused funds will be allowed to
accumulate for the term of this agreement. The pastor will not be entitled to receive any of these
accumulated funds in the event of his termination or resignation nor will he be allowed to carry them
forward to a new term.

2. Book Allowance:
A maximum of $_________ will be provided annually for the pastor to apply toward subscriptions and
the purchase of study books to enhance his pastoral ministry.

3. Study Leave/Sabbatical:
The pastor will be encouraged to take a leave with pay for professional study or ministry rejuvenation
after ______ years of pastoral ministry. See appendix 2 for suggested guidelines

4. Pension Plan:
The church will contribute $_______________ per year toward an RRSP for the pastor.
This could also be done on a matching basis and will be fully transportable.

IV. RESIGNATION or TERMINATION

1. Resignation:
The pastor may resign with a letter to the Official Board and to the congregation to become effective in
____ month(s) time.
Other requirements concerning this process may be outlined in a church constitution.

2. Termination:
The pastor must abide by the policies of the Associated Gospel Churches and adhere to the AGC
Statement of Faith. He must refrain from immoral, unethical and criminal behaviour. He must exhibit
an acceptable level of performance as assessed by a yearly evaluation review.

Signatures;

______________________________ ____________________________
Pastor Date

______________________________
Chairman of the Board of Elders

______________________________
Treasurer
This agreement becomes void with the pastor's termination or resignation.
CHURCH STAFF SALARY SCHEDULES

IMPORTANT NOTE: This document contains TWO methods of determining salaries:

A. The first section is based on a survey of salaries done in 2006, adjusted for
inflation.
B. The second section is based on the salary scale for teachers in the Halton Region
school district. The principles of this can be applied to any local school district.
Either method is recommended. If you require any further information, please
contact the AGC office, or your regional Superintendent.

A. Survey of Salaries 2006

We are grateful to the Fellowship of Evangelical Baptist Churches (FEBC) and the work they do to put together
their document “Determining a Pastoral Compensation Package Using Fellowship Averages”. With their
permission, in 2006, we put together their 2005 averages, adding 2% for inflation, and our 2006 survey results
averages to come up with a suggested salary scale. Since that time we have further adjusted these figures to
allow for a 2% cost of living increase per year, up to 2015 levels.

In our calculations, we have taken some small liberties to make adjustments because our information was
inadequate and our church size breakdowns were too fine for the data we received. Please note that these are
averages. There obviously are much lower and higher salary packages. We trust these will be helpful.

PLEASE NOTE:
The following charts simply records the reported figures in our churches. As this document
was developed in 2015, we suggest a 2% per year cost of living allowance going forward.

Church Income vs. Average Salary (Sr. Pastors)

Income Attendance Avg. Salary

<100,000 >100 38,525
100 – 200 >100 50,195
200 – 300 100-200 58,065
300 – 400 100-200 64,510
200 – 500 68,755
400 – 500 100-200 54,975
200 – 500 74,110
500 – 1,000 200 – 500 79,210
1 million + 500 + 92,010

Church Income vs Average Salary (Other Ministry Staff)

Income Attendance Avg. Salary

200 – 300 100-200 48,360*
300 – 400 200 – 500 45,750
400 – 500 100-200 37,290
200 – 500 53,830
500 – 1,000 200 – 500 55,095
500 + 58,500
1 million + 500 + 68,295
*represents mostly city churches
Ministry Staff Focus Avg. Salaries

Position National Avg. West East

Full time Children’s 54,410 NA 54,410
Worship 60,590 NA 60,590
Youth 52,550 49,000 53,440

Part time Associate 28,680 27,490 29,280

Children’s 20,855 31,075 14,430
Worship 17,330 NA 17,330
Youth 18,025 18,885 16,735

Admin Staff Avg. Salaries

Position Avg. Salary

Full time Office Manager 36,750
Secretary 44,520
Custodian 36,900

Part time Secretary $15.85 /hr

Custodian 10,360

Pulpit Supply

Based on information received, and real needs of those providing “Pulpit Supply”, we would suggest the
following;

Church Attendance One Service Second Service Second Service

Same Sermon New Sermon
100 or less 150 100 125
100 – 200 175 100 125
200 – 500 175 125 150
500 + 200 125 150

Example: Church of 200 – 500 Sunday attendance in two services;

Sunday, First am Service: 175.00
Second am Service, same message 125.00
250 km return travel @ 50¢/km 125.00
Meals 25.00
Motel/Hotel 125.00
Total remuneration $575.00
B. Determining Salary Based on the Local School Board

Using the current Collective Agreement between the Halton District School Board and the Elementary Teachers’
Federation of Ontario-Halton the following suggested salary schedule was developed for AGC Pastors
ministering in the Halton District of Ontario. The actual numbers may vary from district to district and from
province to province. This is meant to provide an existing example.

We have deducted 10% from the Collective Agreement salaries because of the Clergy Residence Benefit
(approx. 7%) and with the anticipation that local AGC churches will provide a matching RRSP contribution
of not less than 3% of the Pastors’ salary per year.

With the successful completion of each ministry year the salary increases by approximately 7%. The
increase is based on a cost of living increase (approx. 3%) as well as the value-added that comes with a
successful year of ministry experience (approx. 4%).
Note: The schedule recognizes limits on the added-value years of experience will provide.

The classifications are intended to recognize, reward, and encourage those who are willing to make the
sacrifices associated with ongoing personal development through accredited academic institutions.

Schedule #1: AGC Pastoral/Ministry Staff

Years of Categories
Experience B A A1 A2 A3 A4
(+2558/yr) (+2558/yr) (+2848/yr) (+2867/yr) (+2867/yr) (+3151/yr)
0 29,768 35,768 40,176 42,922 46,130 48,874
1 32,326 38,326 43,024 45,789 48,997 52,025
2 34,884 40,884 45,872 48,656 51,864 55,176
3 37,442 43,442 48,720 51,523 54,731 58,327
4 COLA 46,000 51,568 54,390 57,598 61,478
5 “ 48,558 54,416 57,257 60,465 64,629
6 “ 51,116 57,264 60,124 63,332 67,780
7 “ 53,674 60,112 62,991 66,199 70,931
8 “ 56,232 62,960 65,858 69,066 74,082
9 “ COLA 65,808 68,725 71,933 77,233
10 “ “ COLA 71,592 74,800 80,384
11 “ “ “ COLA 77,667 83,535
12 “ “ “ “ COLA COLA

See “Category Definitions” below

Category Definitions:
B No post-secondary, or accredited Bible School degree.
A Non - Accredited Bible School degree
A1 Accredited Bible School degree
A2 Completed 1/3 of post-graduate degree or equivalent
A3 Completed 2/3 of post-graduate degree or equivalent
A4 Accredited Post-graduate degree
COLA Cost of Living Increase
Schedule #2:
Sr. Pastors serving churches with 1 to 4 additional full-time ministry/pastoral staff (Associate, Youth,
Worship, Children & Family, etc,) shall be paid according to their placement on the Salary Schedule above,
plus an allowance of $5,913. (ref. “10.03.01 - Head of Program”)

Note: Suggested Salary Schedule for AGC Executive Pastors of churches with 1 – 4 additional full-time ministry/pastoral staff
(Associate, Youth, Worship, Children & Family, etc,) shall be paid according to their placement on Schedule #1

Schedule #3:
Sr. Pastors serving churches with 5 – 7 additional full-time ministry/pastoral staff (Associate, Youth,
Worship, Children & Family, etc,) shall be paid according to the following schedule:

Years of Experience
0 96,463
1 98,307
2 100,941
COLA
(Relative to a Secondary Vice Principal salary schedule)

Note: Suggested Salary Schedule for AGC Executive Pastors of churches with 5 – 7 additional full-time ministry/pastoral staff
(Associate, Youth, Worship, Children & Family, etc,) shall be paid according to Schedule #2 (i.e. Sr. Pastors serving churches with 1 to 4
additional full-time ministry/pastoral staff)

Schedule #4:
Sr. Pastors serving churches with 8 or more additional full-time ministry/pastoral staff (Associate,
Youth, Worship, Children & Family, etc,) shall be paid according to the following schedule:

Years of Experience
0 96,463
1 109,380
2 113,643
COLA
(Relative to a Secondary Principal salary schedule)

Note: Suggested Salary Schedule for AGC Executive Pastors of churches with 8 or more additional full-time ministry/pastoral staff
(Associate, Youth, Worship, Children & Family, etc,) shall be paid according to Schedule #3 (i.e. Sr. Pastors serving churches with 5 to 7
additional full-time ministry/pastoral staff)

07/15
 APPENDIX 1

Determining Qualification for the Clergy Residence Deduction

There are 2 components to determine eligibility for the Clergy Residence Deduction;
the Function test and Status test. Each individual must pass both of these "tests" as
follows;

1. Function - The local church determines the function ie - does the person teach,
preach, perform spiritual duties, etc. In other words, what is their role in their
given context?

2. Status - The denomination determines the status. There are 2 ways in which
an individual can pass the "status test". They can either be a "Member of the
Clergy" or a "Regular Minister".

A “Member of the Clergy”, is someone who has been specifically set apart as a
spiritual leader by their denomination. The government itself does not require
ordination, however, they base their requirements on the criteria determined by each
individual denomination as to how they would "set apart" someone as a spiritual leader.
In our AGC context, this would be ordination. Anyone who has been ordained by the
AGC, or had their previous ordination recognized is a Member of the Clergy and thus
passes the "status test".

All other pastoral staff, including those in more administrative type roles, would qualify
as a "Regular Minister" as long as they meet the following criteria approved by the
AGC Board in 2010;

10.05 Moved that with regard to "regular ministers"

The Associated Gospel Churches recognize the following individuals to be considered in "regular
ministry" within the Association. Any individual who has minimally:
1. Completed the Associated Gospel Churches Compatibility Questionnaire, and
2. Been approved by letter from a regional Doctrine and Credentials Committee with a copy in
the AGC office, and
3. Have been granted a ministry license or certificate and
4. Been voted on at the Board or congregational level for a ministry position in a local church, and
5. Is presently and actively employed in a church and/or Fair Havens Ministries and/or
administrative position within the Association.

Any individual who is not ordained and has not satisfied all of the above requirements
is NOT eligible for the Clergy Residence Deduction. All of their employment income
would be subject to Income Tax and CPP. Call the AGC office for further clarification.
 APPENDIX 2

Sabbaticals

1. Definition

A sabbatical is granted to Pastoral staff as a time of spiritual, emotional, mental and

physical renewal. It is not a holiday or vacation. The sabbatical will provide an
extended time to replenish these resources to maintain effectiveness in the pastoral
role.

Specific goals, plans and dates for the sabbatical must be outlined by the pastor in
advance. Regular progress reports should be provided to the Church Board
throughout the sabbatical period. The duration of the sabbatical will be influenced
by the specific goals to be achieved during the time away however the typical time -
frame is 3 – 4 months.

Each Church is encouraged to create their own unique policy to cover sabbatical
leaves for their pastoral staff.

2. Benefits Coverage

Anyone covered within the AGC Benefit package must submit, in writing, to the
Administrator of our Plan (Susan Page) a detailed outline of the sabbatical
including:

1. The location(s) where the sabbatical will take place.

2. The length of time the sabbatical will cover.
3. Types of activities the employee will be engaged in during the period
covered.
4. Indicate if there is any reduction in salary during the time period of the
sabbatical.

This information will be forwarded to our insurance provider for review and approval
of Benefit coverage during the sabbatical period. The above criteria may impact
your Benefit coverage. Each case is assessed individually depending on the
circumstances.

For more details contact the AGC office for sample policies.
 - Appendix B3 -
TRAVEL AND EXPENSE RECORD

Month of _____________________, _________ Employee ___________________________________

Date Odometer Start Odometer Stop KM travelled Parking $ Meals $ Details

Totals

Totals to be carried to "Ministry Travel Expense Report".

 - Appendix B4 -
MINISTRY TRAVEL EXPENSE REPORT

Submitted by: ___________________________________________________________

For the month of: ______________________________________________,

Information below per totals on attached "Travel and Expense Record"

Visitation ________________ km

Meetings ________________ km

Other Ministry ________________ km

Total kilometres (A)

Ministry travel cost: $ ________________ (B)

Total kilometres at (A) x $ .___ per km

Parking $ ________________ (C)

Meals $ ________________ (D)

Total reimbursement (B + C + D) $ ________________

____________________________________________
Signature of Claimant Date

____________________________________________
Approved for Payment Date
 Appendix C
1. Sample Employee Handbook

2. Standards of Employment Statement

3. Full and Final Release Statement

 - Appendix C1 -

- SAMPLE -

EMPLOYEE HANDBOOK

for the Employees of the

______________________________________CHURCH

This is a working document to be updated as

required for the day-to-day operation of the
Church.

Revised July, 2015

39
 ____________________________________ CHURCH
EMPLOYEE HANDBOOK
1. Employment Classifications

a. Permanent, Full-Time Employee

An employee who has received a written offer of full-time employment and has successfully
completed a three month probationary period, will be classified as a permanent, full-time
employee. Full-time employees work not less than 25 hours a week, and are salaried.

b. Permanent, Part-Time Employee

An employee who has received a written offer of part-time employment with a regular number of
hours or days to be worked per week, which hours average less than 25 hours a week, and has
successfully completed a three month probationary period, will be classified as a permanent, part-
time employee. While the classification of the employee is part-time, the nature of the work being
performed is considered to be on-going. Permanent, part-time employees may be salaried or
hourly rated. Hourly rated employees will be compensated for approved overtime in accordance
with the applicable Employment Standards Act. Salaried permanent part-time employees may be
eligible for lieu time in recognition of excessive hours of work during peak periods (See: Lieu Time).

c. Temporary Employee
An employee who has received a written offer of temporary employment for a specific period of
time not exceeding six months will be classified as a temporary employee. Such an employee may
be hired to cover a leave of absence, etc., or may be hired to help deliver seasonal programs
offered by the ministries of _______________Church. A temporary employee may work full-time
hours for the period of the assignment or may work parts of days.

d. Volunteers
The ______________ Church recognizes the invaluable assistance provided by volunteer workers.
Volunteers must be approved by the Board, or the immediate Supervisor if applicable, and are not
remunerated for their services. However, volunteers may be reimbursed for approved expenses
incurred in carrying out their assigned tasks.

2. Probation
All new permanent staff are required to successfully complete a standard three month probationary
period which will permit an assessment of the skills and abilities of each new staff member in the role.
The Pastor, or the immediate Supervisor if applicable, will provide a probationary appraisal of the staff
member's performance within the first three months of employment. A decision to continue or
terminate the employment of probationary staff will be determined by the results of the appraisal.

3. Job Descriptions
At the commencement of employment, all staff will receive a written Job Description which clearly
outlines the duties and responsibilities of the position.

4. Employment Contracts
An offer of employment may initially be made orally. If accepted, the offer shall be communicated in a
formal letter (contract) which fully outlines the term and conditions of employment (starting date, salary,
benefits [group insurance, pension, housing allowance, board and lodging, expenses, etc.], vacation
time) including the fact that employment by the _______________ Church requires that the employee's
lifestyle must not evidence unethical or immoral conduct or behaviour that in the opinion of the
_____________ Church is unbecoming of a Christian and contrary to biblical principles. It shall also be
a condition of employment that an employee affirm in writing the mission of the ______________
Church. (Include in appendix) A copy of this Employment Contract must be signed by the employee,
and placed along with the job description and the Employee Record form in their personnel file.
5. Performance Appraisal
Each permanent employee will receive an annual appraisal of his/her performance, which may include
specific goals to be achieved within the evaluation period. The appraisal is to be an inter-active process
between the staff member and her/his Supervisor.
If the result of the annual appraisal indicates that a staff member's overall performance is less than
competent, then a specific Improvement Plan will be established. The intention of such a plan is to
assist the staff member to improve performance to an acceptable level within a specified period of time.
Should the staff member not be successful in improving performance, a decision may be made
concerning demotion or termination.

6. Termination
a. Voluntary Termination
Staff wishing to resign a position are expected to provide written notice of resignation. It is
considered basic courtesy to provide an employer with notice equivalent to the regular pay period.
Staff who hold senior pastoral or management positions are asked to provide at least one month's
notice.
b. Involuntary Termination and Dismissal
Staff may be terminated by the ____________ Church because of:
 redundancy of the incumbent's position or lack of work;
 unsatisfactory work performance;
 breach of contract, i.e. unethical or immoral conduct that would damage the reputation of
the ____________ Church;
 misconduct, i.e. theft, damage to property of the ____________ Church, harm to other
staff, etc.;

In all cases of termination, appropriate notice and/or warning of termination will be given in accordance
with current provincial employment standards legislation. Factors such as length of service, position,
education, experience, etc. will be considered in giving of notice of termination. In the case of #4 above,
no warning needs to be given.

7. Harassment
The ________________ Church recognizes the right of all staff and volunteers to work in an
environment that is free from harassment, which is defined as "vexatious comment or conduct that is
known or ought reasonably to be known to be unwelcome" (Human Rights Code Section 10.1).

Harassment, including sexual harassment, will not be tolerated. (See “Sexual Abuse Policy” in
Appendix)

Complaints arising from "a course of vexatious comment or conduct" will be investigated by an
independent party, in an environment of confidentiality, and within 90 days. Where a complaint of
harassment is substantiated, the offender, regardless of seniority or position, will be subject to
appropriate disciplinary measures up to and including dismissal.

Employees will always be afforded due process in the investigation of any alleged harassment. An
accused person will always be presumed innocent until proven otherwise.

8. Pay Periods
Full-time and part-time staff are generally paid semi-monthly (or whatever pay period is employed by
the church). A wage statement is issued to each employee, detailing earnings and deductions.

The __________________ Church does not grant pay advances.

9. Vacation
a. Vacation Entitlement
 Part-Time and Temporary Staff
Part-time and temporary staff will receive vacation pay at the rate of 4% of earnings.
 Full-Time Permanent Staff
All permanent, full-time employees are required to take an annual vacation.
 Vacation time is accrued during the year as follows:
o After one full year of continuous service - 10 working days entitlement (equivalent to
4% of total wages).
o After three full years of continuous service - 15 working days entitlement (equivalent to
6% of total wages).
o After ten full years of continuous service - 20 workings days entitlement (equivalent to
8% of total wages).

Employees who have worked for less than one year receive vacation pay at the rate of 4% of gross
pay for the part of the year worked. An additional vacation day will be allowed when a statutory
holiday falls within the vacation period.

Vacation accrues over the calendar year as follows: 0.83 days per month (10 days per year); 1.25
days per month (15 days per year); and 1.65 days per month (20 days per year). An employee
whose employment by the ______________ Church began on or prior to the 15th day of the month
will accrue a vacation credit for that month. An employee whose employment began on or after the
16th day of the month would not be entitled to receive vacation credit for that month.

Approval of vacation requests will be at the discretion of the Board and will not be unreasonably
withheld. Staff are encouraged to use their vacation credits before December 31 of each year. A
maximum of five unused vacation days may be carried over into the next vacation year. Where
there are more than five days unused vacation time on December 31, they will be paid out by the
second pay period in January.

If an employee is seriously ill during vacation, such an illness of three days or more may be
considered sick leave and not vacation, if a physician's verification is provided. Exceptions to the
vacation entitlement may be made at the time of employment, or at other times by the Board in light
of special circumstances.

b. Statutory Holidays
The _____________ Church observes the following statutory holidays:
 New Year's Day
 Family Day
 Good Friday
 Victoria Day
 St. Jean Baptiste Day (Quebec only)
 Canada Day
 Labour Day
 Thanksgiving Day
 Remembrance Day (Alberta, B.C., Manitoba, Saskatchewan, Nova Scotia)
 Christmas Day
 December 26 (Boxing Day)
All staff will be paid for statutory holidays if they meet the guidelines of the applicable Employment
Standards Act.

10. Overtime (Employees paid hourly)

When an employee works more than 44 hours in a week he/she is entitled to 1 1/2 times the regular
hourly rate of pay for the extra hours or time off with pay may be awarded in place of overtime pay.

11. Lieu Time

Subject to the approval and discretion of the Board, lieu time may be granted to permanent salaried
employees in recognition of excessive hours of work during peak periods. Lieu time must be taken
within 60 days, and may not be accumulated beyond that period.

12. Group Insurance Plan

All permanent, full-time employees under age 70, who work a minimum of 25 hours a week, will be
enrolled in the AGC group insurance plan following the probationary three month period. The plan
provides term life, accidental death and dismemberment, long term disability (LTD), comprehensive
health care, travel insurance and basic dental care coverage. Dependent coverage is also available.
LTD Benefits cease at age 65 and Life Insurance is reduced to half. All other benefits cease at age 70.
13. Benefits while on Long Term Disability
Employees who are on Long Term Disability will have their benefits continued during their leave.
Should the employee’s leave extend past 24 months, the AGC will discontinue paying the benefit
th
premium effective the first day of the 25 month of their leave. Employees may choose to connect with
the benefits provider to continue with an individual plan and pay the premiums on their own.

14. Sick Leave and Personal/Family Days

Full-time permanent staff are provided up to 5 days of sick leave and 5 days of personal/family days at
full pay per calendar year. Sick leave may be accumulated up to a maximum of 30 days. Sick leave is
calculated on the calendar year and staff joining the organization during the year have their sick leave
pro-rated. When an illness requires an absence of three days or more, a doctor's note may be required
in order to ensure that earnings are not interrupted.

15. Extended Absence for Illness

If serious illness or accident requires extended absence, staff will use their accumulated sick leave at
full pay first, and when that is exhausted, the _________________ Church will continue to provide sick
leave at two-thirds pay for a period of up to 17 weeks.

16. Doctor's Appointments

Staff are encouraged to schedule appointments at times that will not interfere with the regular work
schedule. However, when that is not possible, employees will be allowed up to two hours for such
appointments without deduction from pay or requirement to make up time.

17. Leaves of Absence

a. Bereavement
Three days leave of absence with pay will be granted to permanent, full-time staff when a death
occurs within the immediate family, i.e., parents, spouse's parents, spouse, child, brother, sister,
grandparent.

b. Jury Duty
The ________________ Church recognizes that jury duty is a civic responsibility and so will provide
the necessary time off to any staff member who receives a summons to jury duty, and will continue
to provide wages subject to the following guidelines:
 All Staff:
a. Proof of summons is provided to the Board.
b. Statement of attendance from the Jury Office is provided once jury duty is completed.
 Full-Time and Permanent, Part-Time Staff:
Staff will receive their regular wages while attending jury duty, less the stipend provided by
the provincial government.
 Temporary Staff:
Temporary staff, identified as those who are employed for a temporary assignment less
than six months in duration, are not eligible to receive wages while on jury duty. Decisions
concerning the application of this policy outside the Province of Ontario rest with the Board.

c. Pregnancy/Parental Leave
The ______________ Church will permit unpaid pregnancy and parental leaves in compliance with
the Employment Standards Act (Ontario) or such comparable legislation as may apply in other
jurisdictions.

d. Moving Day
One paid day per calendar year will be granted to permanent, full-time staff who are moving their
primary residence.

e. Personal Absence
Personal absences may be approved in advance by the Board, and arrangements made to take
this time off without pay or to make up the time before the end of the next pay period.

18. Ministry Use of Personal Vehicle

The ________________ Church will reimburse employees for the authorized ministry use of their
personal vehicles in accordance with the per kilometre rate approved by the Treasurer and/or Finance
Committee.
19. Pre-Existing Benefit Arrangements
Existing vacation and sick leave benefit arrangements in effect at the time this policy is completed, but
which differ from the policy, will continue to be honoured.

(attach an Appendix featuring sample job descriptions, employment contracts, lifestyle & morality policies,
sexual harassment policies, abuse prevention policies, etc. A few are provided below, others may be
found in Appendix D of the Church Administration Handbook)

SUGGESTED “Lifestyle & Morality” declaration;

Any person who applies for employment in _______________ Church will be asked to sign in
agreement with the following:

a. I believe that I possess the spiritual qualifications for ministry as set out in I Timothy 3:2-7 and
Titus 1:6-9. (pastoral staff only)

b. I believe that I possess the moral qualifications for employment in ______________ Church.
(i.e., have a reputation for sexual purity and respect for life). I understand that such things as
fornication, sexual addiction, adultery, homosexuality (approving, promoting or practicing), incest
and other sexually deviant behavior, or the support of abortion, euthanasia, etc. will bar a person
from employment at __________________________ church.

c. I believe that I possess the ethical qualifications for employment in _______________ Church.
These include financial integrity, family stability, and a consistently good reputation in the
community.

d. I will endeavor to avoid both publicly and privately those questionable pursuits which are not wise
because they destroy personal testimony, tend to bondage, or adversely influence other
believers.
e. I understand that a failure to maintain the above standards while in employment with
____________________ Church will be cause for a review of my employment status.

Please sign below to show that you agree with and are willing to abide by the above standards.

Signature: ____________________________________________________________
Name (please print): __________________________ Date: ____________________
SUGGESTED “Sexual Abuse/Sexual Harassment Prevention” Policy;

The ______________________ Church accepts that:

1. Sexual abuse/sexual harassment is a sin. (Matthew 18:6; Ephesians 5:3; I Thessalonians

5:22)

2. Sexual abuse/sexual harassment is a breach of trust and an abuse of power and authority by
a person in a position of leadership.

3. Sexual abuse/sexual harassment causes permanent physical, emotional and spiritual harm
to the victim as well as the perpetrator.

Therefore, the ____________________Church will not tolerate sexual abuse or sexual harassment
on the part of staff, volunteers or members, and is committed to providing safe environments for
worship, ministering, and fellowship for all members and adherents.

All church staff and volunteers should be prepared to provide a criminal reference check to
determine their suitability for ministry to vulnerable persons (ie. children, youth, handicapped,
seniors).

I am in agreement with this policy and will provide a criminal reference check.

Signature: ____________________________________________________________
Name (please print): __________________________ Date: ____________________
 - Appendix C2 -

STANDARDS FOR EMPLOYMENT

Any candidate who applies for ministry or for a leadership position in the AGC will be considered, at
the time of application, under the following categories:

a. The spiritual qualities/characteristics set out in I Timothy 3:2-7, Titus 1:6-9, Galatians 5:22-23
and 1 Corinthians 13:4-8a.

b. The moral qualifications (i.e., have a reputation for sexual purity and respect for life). Such
things as fornication, sexual addiction, adultery, homosexuality (approving, promoting or
practicing), incest and other sexually deviant behavior, or the support of abortion, euthanasia,
etc. will bar a person from ministry in the Associated Gospel Churches.

c. The ethical qualifications for ministry. These include:

 honesty and integrity
 reliability
 teachability and accountability
 being a team player
 marriage and family stability
 financial integrity
 a consistently good reputation in the community

Ministry leaders in the AGC will be expected to avoid both publicly and privately those questionable
pursuits which are not wise because they destroy personal testimony, tend to bondage, or adversely
influence other believers. A failure to maintain the above standards while in ministry with the AGC
will be cause for a review of a pastor’s or leader’s suitability for such ministry.

Taken from the AGC Ministry Application Nov 2013

 - Appendix C3 -

- SAMPLE -

FULL AND FINAL RELEASE

FOR VALUABLE CONSIDERATION as set forth in letter dated _____________________ attached

the performance of the covenants in the letter, I being of lawful age, for myself, my heirs,
administrators, executors, successors and assigns hereby fully and forever release, acquit and
discharge the said _______(Church Name)_________________________, their employees,
servants, agents, trustees, elders, deacons, volunteers from any and all actions, causes of action,
claims and demands of whatsoever kind or nature on account of any and all known and unknown
injuries, losses and damages by me sustained as a result of my employment with
________________(Church Name)______________ and the termination thereof for which injuries,
losses and damages I claim the said ________________(Church Name)______________ to be
legally liable, which liability is expressly denied, it being understood and agreed that the acceptance
of the consideration as set out above is in full accord and satisfaction of a disputed claim and that
the payment of said consideration is not an admission of liability.

It is expressly understood and agreed that this release and settlement is intended to cover and does
cover not only all now known injuries, losses and damages, but any future injuries, losses and
damages not now known or anticipated but which may later develop or be discovered, including all
the effects and consequences thereof:

AND I hereby declare that I fully understand the terms of this settlement; that the amount stated
herein is the sole consideration of this release and that I voluntarily accept the said consideration for
the purpose of making a full and final compromise, adjustment and settlement of all claims for
injuries, losses and damages resulting or to result from said termination.

AND I, in consideration of a similar undertaking by______________(Church Name)_____________

do hereby agree to keep confidential the terms of this settlement save for such disclosure as
required of me by law, including reporting to Canada Revenue Agency.

AND FOR THE SAID CONSIDERATION I further agree not to make any claim or take any
proceedings against any other person or corporation who might claim contribution or indemnity under
the provisions of The Negligence Act and the Amendments thereto from the person, persons or
corporation discharged by this release.

IN WITNESS THEREOF, I have hereunto set by hand and seal this day of
________(date)__________ , having read and understood this document.

____________________________________ _____________________________________
Name Signature

Witnesses;

____________________________________ ______________________________________
Name Signature

____________________________________ ______________________________________
Name Signature