Protestants often accuse Catholics of believing in works-based salvation. Yet Catholics claim to hold to salvation by grace. To engage in effective dialogue, it is necessary to understand what Catholics mean when they talk about meritorious works.
The Catholic Church teaches there are two types of merit: condign merit and congruous merit. Condign merit carries an obligation for reward, such as payment for a rendered service. Congruous merit allows for but does not require fitting and appropriate reward, such as a gratuity (tip) for a well-rendered service.
Catholic doctrine teaches that people cannot do works of condign merit. In other words, God can never be in our debt for how we perform or act. It teaches that people can, however, do works of congruous merit. In other words, it is fitting and right for God to reward people for certain works. For Catholics, penance is one kind of work that can earn reward from God—in this case make up for sinful actions. Anything that would be considered a good work might have congruous merit. Catholics maintain that God is not obligated to reward these works based on the works alone, but that He has promised to reward them and is thus bound to do so.
The Catholic Church teaches that baptism is the sacrament that removes original sin and, in a way, wipes the slate clean for a person. Then, that person can do works of congruous merit. Apart from works of congruous merit, Catholics hold it would be inappropriate for God to grant a person entrance to heaven. If a Catholic dies in "a state of grace" (right relationship with the Catholic Church, baptized and not having committed any mortal sins) and does not have enough congruous merit to make up for the sins he has committed, the person is sent to purgatory to pay penalties for sins. After a time in purgatory, the person is then granted entrance into heaven.
Catholics maintain that this system is based on grace. God exhibited grace in sending Jesus to wipe the slate clean and in promising to reward good works. They claim that they are not truly earning salvation because God is not technically required to reward good works. Even so, it is clear that works in some way earn entrance into heaven in Catholic doctrine, and thus the Catholic doctrine of salvation includes works. Protestant orthodoxy teaches salvation by grace alone. No amount of good works can earn salvation, in any way, from God.
Protestants claim that not only did Jesus pay the complete penalty for sins (there is no such thing as purgatory), but that He is also the only source of righteousness (we do not attain righteousness through good works). As Paul wrote, "Indeed, I count everything as loss because of the surpassing worth of knowing Christ Jesus my Lord. For his sake I have suffered the loss of all things and count them as rubbish, in order that I may gain Christ and be found in him, not having a righteousness of my own that comes from the law, but that which comes through faith in Christ, the righteousness from God that depends on faith" (Philippians 3:8–9). Our righteousness comes through faith in Christ, not through works.
Similarly, Romans 4:4–8 says, "Now to the one who works, his wages are not counted as a gift but as his due. And to the one who does not work but believes in him who justifies the ungodly, his faith is counted as righteousness, just as David also speaks of the blessing of the one to whom God counts righteousness apart from works: 'Blessing are those who lawless deeds are forgiven, and whose sins are covered; blessed is the man against whom the Lord will not count his sin.'"
The idea that trying hard, being good, performing enough good deeds, having the right morals, will earn favor from God is unbiblical. "For by grace you have been saved through faith. And this is not your own doing; it is the gift of God, not a result of works, so that no one may boast. For we are his workmanship, created in Christ Jesus for good works, which God prepared beforehand, that we should walk in them" (Ephesians 2:8–10).
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