The Cost of Living Analysis application expands on the simple county-level Cost of Living Index figure included in every Salary Report. It is designed specifically to help church leaders characterize their community and localize nationwide pay data and make fair, informed compensation decisions for their ministry context.

You can use the Cost of Living Analysis application to gain a broader and deeper understanding of local economic data, and then apply that knowledge to refine the nationwide salary ranges in your salary reports.

The first section of this article will get into the nitty-gritty of what the figures mean and where they come from. If you're just looking for a guide on how to use the application, just hop down to the "How to Use the Cost of Living Analysis Application" section!

Accurately comparing pay from one community to another is one of the most challenging parts of understanding church compensation. Every ministry setting is unique, and pay levels are influenced by several key factors that go far beyond geography.

In most cases, church compensation is shaped by three closely connected elements:

ChurchSalary combines these factors and performs a search for “similar employees at similar churches” using:

To measure pay at the local level, ChurchSalary must first control for these factors. That divides employees nationwide into between 360 and 3,600 cohorts (because 18 positions x 2 statuses x 10 budget ranges x 10 size ranges = 3,600). For example, one cohort is “Full-time Senior Pastor at a $1M–$2M Church" - status, position, and budget are all defined (size is optional).

Adding a filter based on location subdivides these 360 to 3,600 cohorts into millions of different subcategories. For example, “Full-Time Senior Pastors at a $1M–$2M Church in Indianapolis, IN.”

If we set a goal of at least 7 employees for every one of the 20,000 cities in the United States, ChurchSalary would need between 7.2 million and 72 million employees to calculate a local average for every city in the country! The United States does not have 7 million churches, let alone 7 million church employees.

The Cost of Living Analysis application gathers local economic and demographic data from multiple sources—powered by ChurchSalary’s Location API—so you can see how your church’s location affects compensation in your ministry context. You'll be able to view a detailed local economic profile across four geographic levels.

Note that for rural churches or those not within a defined metro area, the system automatically uses fallback options such as:

At the core of the Cost of Living Analysis application is the Local Income & Cost Analysis tool. Instead of relying on a single “best guess,” our local income and cost analysis uses machine learning and cluster analysis to find clear, consistent patterns across up to 17 different economic indicators. These indicators include:

The Cost of Living Analysis application helps church leaders align their pay strategy with their ministry’s compensation philosophy. To do this, the tool asks two guiding questions:

Note that the tool itself contains a brief guide that can be accessed by expanding the "How do I use this tool?" dropdown. But we'll go more in depth here as well.

Based on internal research, ChurchSalary has identified a set of metrics that are most likely to influence differences in pay at the local level. They can be grouped into two broad categories: Income and Costs

Separately, none of these metrics are able to predict local pay more than 10-33% of the time. However, when looked at collectively, common thresholds among these 7 income and cost metrics across 4 geographical levels have proven to be a reliable predictor of how local pay varies (based on 46 metro areas where ChurchSalary has direct measurements).

The first question you need to answer is how close to the church you expect employees to live. The answer to this question may inform which geographical level you lean on when adjusting salaries based on location, evaluating housing allowance/parsonage costs, and gauging whether staff are paid a living wage.

In general, someone living within the census tract may walk to church. Someone living in the same city/place or county may be able to drive to church in under 20 minutes. And someone living in the same metro area may have a longer drive or train ride in.

Depending on where someone lives, these are the numbers you should pay most attention to in the summary chart at the top of the tool.

Next, you need to analyze how competitive you want the pay to be.

To ensure that local churches are not able to easily poach your staff, you may need be more aggressive with adjusting based on location and make the pay scale extremely local. Embracing this philosophy may lead you to adopt the second or third common threshold in the Local & Income Cost Analysis section or to focus on county or place-level metrics.

Or, you could make your pay reasonably local to ensure that your church is adjusting pay enough that employees can afford to live and thrive in your local community. In this case you may decide to adopt the first common threshold in the Local & Income Cost Analysis section or to focus on metro-level metrics.

As we noted above, no single metric predicts local pay variation 100% of the time. ChurchSalary will continue to conduct research and update our guidance over time. For now, we recommend you learn about your community by studying the data on this page and the common thresholds identified in the Local Income & Cost Analysis section.

You can use the dropdown menu in the In-Depth Research section to compare demographic, income, and cost metrics for your local community. Click the Download button to download a copy to use in a presentation or discussion.

This chart will show multiple geographic perspectives like City vs. County or Metro vs. Rural, with the percentage difference for the statistic you are viewing. For example, the chart above shows that the Median Household Income in the city of Orlando, FL is $69,414, which is 10.7% lower than the national average.

The final tool allows you to create a custom table to compare several metrics across multiple geographic levels. You can select up to 5 metrics to compare demographics across multiple geographic levels.