Honorarium

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. Another example includes the payment to guest speakers at a conference to cover their travel, accommodation, or preparation time.

Taxation of honoraria

Australia

An example of this is the payments made by Australian 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.