An honorarium is either:
- an honorary reward for voluntary services, or
- a fee for professional services voluntarily performed.
Honorariums
Australian Taxation Office
Honorariums are voluntary payments. They are mainly given to volunteers, hobbyists and professionals who choose to provide their services for free.
Honorariums are a way to say ‘thank you’ and show appreciation for a person’s contribution to an organisation. They are sometimes called ex gratia payments. Honorariums can be money or a gift.
There is no maximum or minimum amount of an honorarium. However, the value of the honorarium is usually less than what a person would have been paid if they were an employee or independent contractor.
Honorariums versus wages and fees
True honorariums are not paid in exchange for services or time, but as a token of appreciation. If a person is carrying out work in exchange for payment, it’s likely that a wage or fee should be paid, and not an honorarium.
Usually honorariums are one off payments. If an organisation is giving someone an honorarium on a regular basis, it’s important to think about whether the person should be engaged as an employee or independent contractor instead.
There are legal differences between unpaid work arrangements compared with paid work, and there are significant penalties for misclassifying employees as unpaid workers.
Before offering or accepting an honorarium, it is important to understand employment relationships and independent contracting arrangements to make sure an honorarium is the right fit for the circumstances.
In practice:
Loren’s honorarium for directing a play is actually a fee
The Big Little Theatre Group is an independent theatre company putting on an upcoming play. The theatre group has found a director to develop the production. The director is a professional and has experience directing successful plays.
The director is offered and agrees to a payment of $8000 for the duration of the project in exchange for directing the play. This payment is called an honorarium and is paid in two $4000 instalments: one at the beginning and one at the end of the final rehearsal.
On the agreed dates, the theatre group pays the director the instalments.
Although the payment is called an honorarium, this payment is a fee for the director’s services.
Tyler’s payment is a genuine honorarium
For the second year in a row, Tyler is volunteering at their local community arts festival. The festival celebrates local artists through performances, workshops and exhibitions. It is organised by a non-profit with some government and private funding for the event.
The non-profit organisation relies on volunteers to help with the event co-ordination. Tyler assists with the artist schedule and setting up the exhibition space.
As a token of appreciation for contributing to the event, the organisers give Tyler an honorarium gift card to the value of $200. This gift card is an honorarium presented as a thank you for their dedication and hard work throughout the event.
Catherine’s ex gratia payment for teaching dance is actually a wage
Catherine is a former professional dancer who teaches a dance class to children at a non-for-profit association once a fortnight.
The association provides the space, the music and the time and schedule for classes. Catherine is required to attend to teach the class and is paid $30 for each hour she teaches. The payment is labelled as an ex gratia payment.
Even though this payment is labelled as an ex gratia payment, Catherine is actually an employee. The payment is actually a wage. This also means that other laws relating to employment relationships also apply.
Keep learning:
Honorariums versus reimbursements and allowances
Honorariums are different from reimbursing someone for expenses or paying an allowance.
A reimbursement:
- is a payment made to someone to cover the cost of an expense
- is the exact amount that the expense is.
An allowance is a standard amount paid to cover an anticipated or estimated expense. The actual cost of the expense may be less than the allowance – the difference does not need to be paid back.
More in this section:
Volunteering, work experience and student placements
Volunteering, unpaid work experience and internships, and student or vocational placements are different kinds of unpaid arrangements. Done right, they benefit individuals and workplaces. Unpaid work arrangements are not a substitute for paid workers.
