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An honorarium is an ex gratia payment (i.e., a payment made without the giver recognizing himself as having any liability or legal obligation) made to a person for his or her services in a volunteer capacity or for services for which fees are not traditionally required. This is used by groups such as schools or sporting clubs to pay coaches for their costs.[1][2] Another example includes the payment to guest speakers at a conference to cover their travel, accommodation, or preparation time.

Taxation of honoraria


An example of this is the payments made by Australian schools to their sporting coaches.[3] 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)[4] to the tax office and therefore do not have to include this money in their annual tax return.


In Canada, honoraria are considered salary and thus, taxable income under the Income Tax Act.[5][6] 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.[5]

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.[7]

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.[8][9]


Under Indonesian National Laws, honorarium recipients are subjected to withholding tax under Income Tax Article 21.[10][11]

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.[12] 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.[13]

United Kingdom

Honoraria to employees are subject to Income Tax and National Insurance contributions under PAYE.[14][15] However payments are made based on services required and not bound by any contractual arrangements.

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.[16]

See also


  1. http://ethics.wa.gov/opinions/99_03.htm An example of the rules for payment of an honorarium in the United States.
  2. http://www.athrec.mcmaster.ca/clubs/forms/2006-2007/Athletic%20Sport%20Clubs%20Manual%20-%202007.pdf A Canadian example of the use of an honorarium.
  3. http://www.bgs.qld.edu.au/news/2007Newsletters/2007_news10.pdf An example of an Australian school paying a coaching honorarium.
  4. http://www.ato.gov.au/print.asp?doc=/Content/8729.htm Australian tax law regarding the payment of honoraria.
  5. 5.0 5.1 How to Pay an Honorarium
  6. Individual Honoraria (bad link!)
  8. Report No. 43 of the Director of Audit
  9. Mandatory Provident Fund
  11. Taxation of Expatriate Employee
  12. When to tax honoraria
  13. Activities subject to withholding tax
  14. HM Revenue and Customs. "Honoraria and similar payments". PAYE for employers. Retrieved 26 May 2012.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  15. HM Revenue and Customs. "NIM02205 – Class 1 NICs: Earnings of employees and office holders: Honoraria and similar payments". National Insurance Manual. Retrieved 26 May 2012.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  16. Honorarium Payment Guidelines