Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Courses
  • Find a Job
  • Tutoring
  • Home
  • Professionalism & Career Development

Honorarium - Explained

What is an Honorarium?

Written by Jason Gordon

Updated at March 8th, 2022

Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Marketing, Advertising, Sales & PR
    Principles of Marketing Sales Advertising Public Relations SEO, Social Media, Direct Marketing
  • Accounting, Taxation, and Reporting
    Managerial & Financial Accounting & Reporting Business Taxation
  • Professionalism & Career Development
  • Law, Transactions, & Risk Management
    Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
  • Business Management & Operations
    Operations, Project, & Supply Chain Management Strategy, Entrepreneurship, & Innovation Business Ethics & Social Responsibility Global Business, International Law & Relations Business Communications & Negotiation Management, Leadership, & Organizational Behavior
  • Economics, Finance, & Analytics
    Economic Analysis & Monetary Policy Research, Quantitative Analysis, & Decision Science Investments, Trading, and Financial Markets Banking, Lending, and Credit Industry Business Finance, Personal Finance, and Valuation Principles
  • Courses
+ More

Table of Contents

What is an Honorarium?Determining an HonorariumTax Treatment of an Honorarium

What is an Honorarium?

An honorarium is otherwise called an ex gratia payment. 

It is a voluntary payment made to an individual for the services they render, this type of fee is not legally required. 

This type of payment is often made to a volunteer or guest speaker as a recognition of the role of the individual. 

An honorarium is not an official charge, neither is it required traditionally, this type of payment is made by a giver who has no legal obligation to the receiver. 

An honorarium is regarded as a taxable income.

Back to: PROFESSIONALISM & CAREER DEVELOPMENT

Individuals give volunteers, speakers or invited guests honorarium to compensate them for their efforts. 

It is a way of showing that the service rendered by an individual is recognized. 

Oftentimes, honoraria are given to cover costs such as travel expenses or feeding expenses for a speaker at a conference or symposium. 

An example of an honorarium is a sum of money given to a medical expert to speak at a medical talk organized for teenagers, or given to a farmer for training other farmers. 

Generally, honoraria are given to show appreciation to individuals, it is not a payment or money legally required.

Determining an Honorarium

An honorarium is determined by the giver, it is also dependent on the amount of effort an individual put in the delivery of the service. 

Most times, there is a predetermined amount that some people give as an honorarium but the amount can change depending on how well an individual impress the giver of the honorarium. 

In certain cases, a speaker at a conference put much effort in preparing the speech to be delivered to the audience. 

Also, the stress of traveling and the expenses accrued by the individual are considered when determining honorarium. 

The giver of the honorarium also considers many other ways through which the receiver can generate money with the time spent for preparation.

Tax Treatment of an Honorarium

The Internal Revenue Service in the United States regards honorarium as an income, it is their subject to tax payments. 

Just like other income, honoraria are reported to the IRS by organizations who pay them. 

Honoraria that exceed $600 a year are filed on a 1099-MISC form. 

Receivers of honoraria report it on Schedule C of Form 1040. 

Honoraria given for duties that are not part of the individual's business are reported on line 21 of Form 1040. 

In some cases however, honoraria are tagged gifts and not taxable income. 

Examples of such honoraria include honoraria given to ministers for weddings, speeches and related activities.

honorarium ex gratia payment

Was this article helpful?

Yes
No

Related Articles

  • Certified Data Processor - Explained
  • Real Estate Concentration - Explained
  • MBA Programs - Explained
  • Develop a Professional Brand - Starting Your Day



©2011-2023. The Business Professor, LLC.
  • Privacy

  • Questions

Definition by Author

0
0
Expand