An honorarium is an ex gratia payment, i.e., a payment made, without the giver recognizing themself as having any liability or legal obligation to the recipient for their Volunteering services, or for services for which fees are not traditionally required. It is a common remuneration practice in schools or , for teachers and coaches.[ Washington State Executive Ethics Board, ethics.wa.gov, An example of the rules for payment of an honorarium in the United States. ][ cbc.ca, Sports, Coaches courted with payment in minor hockey, Gone are the days when all coaches were unpaid volunteers, By Kristina Rutherford, CBC Sports, Dec 05, 2008][ Caring.com, What is the standard donation for a minister who performs a memorial service?, July 13, 2016. ]
Taxation
Australia
An example of this is the payments made by
schools to their sporting coaches.
They are ostensibly receiving a reimbursement for their costs in their voluntary roles as coaches. The concept of an honorarium has a tax implication. In Australia, recipients of these funds make a tax declaration (known as the hobbyist form)
to the tax office and therefore do not have to include this money in their annual tax return.
Canada
In Canada, honoraria are considered salary and thus, taxable income under the
Income Tax Act.
In the case where a gift is substituted for honorarium (gift in lieu of money), it is still classified as a taxable benefit by Canada Revenue Agency.
In cases where an honorarium is paid to an individual who is not a resident of Canada, the honorarium is still subjected to income tax withholding (usually 15%) unless prior approval was obtained from Revenue Canada.[ McMaster University's Faculty of Health Sciences, THE HOOKER DISTINGUISHED VISITING PROFESSOR TRUST FUND. ]
Hong Kong
Honoraria are subjected to taxation under HK Laws. Chap 112
Inland Revenue Ordinance and also subjected to the Mandatory Provident Fund, a compulsory saving scheme for retirement.
[ Hong Kong Special Administrative Region, Report No. 43 of the Director of Audit][ University of Hong Kong , Mandatory Provident Fund]
Indonesia
Under Indonesian National Laws, honorarium recipients are subjected to withholding tax under Income Tax Article 21.
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New Zealand
When honorarium is paid to an employee, such as mayors, chairpersons, and local clubs and societies, it is not subject to withholding tax but is subject to income tax.
[ New Zealand Inland Revenue website, When to tax honoraria. ] However, if the payment was not made to the above-mentioned category of people, it is subject to withholding tax rate between 33c to 48c.
[ New Zealand Inland Revenue website, Activities subject to withholding tax]
Sri Lanka
In Sri Lanka, remuneration received by Government Ministers and Members of Parliament (MPs) are considered by the President as Honoraria. As such deemed by him to be not subject to PAYE as MPs have
honorific before their names as such receive honorariums and not salaries from the State.
[ Cabinet: State employees liable for PAYE Tax]
United Kingdom
Honoraria to employees are subject to Income Tax and National Insurance contributions under PAYE.
However payments are made based on services required and not bound by any contractual arrangements.
The British spy agencies euphemistically call a bribe an "Honorarium" or "King George's cavalry".[Tom E. Mahl, Espionage's Most Wanted: The Top 10 Book of Malicious Moles, Blown Covers, (2003)][Joseph Goulden The Dictionary of Espionage: Spyspeak into English, 2013.][Scott Shane Russia Isn’t the Only One Meddling in Elections. We Do It, Too., New York Times, Feb. 17, 2018.]
United States
An honorarium paid to a U.S. resident for services performed within or outside the U.S. is subject to federal (and in some cases state) income tax.
[ UCAR, Honorarium Payment Guidelines]
Members of the United States Congress are prohibited by law from accepting honoraria for things such as speeches or articles.
See also
