Honorariums are a kind and practical way to reward the hard working volunteers that contribute so much to a strata company.  Keep in mind the potential tax implications though.


Honorariums in Strata

With the day to day responsibilities of a strata company often being met by volunteers, it’s a common occurrence for the council of owners (COO) to budget for and pay an honorarium to their hard working partners as a show of appreciation at the end of the year.  

The payment of an honorarium is a commendable practice but, depending upon the circumstances, it can often come as a surprise to learn that there can be income tax consequences for the volunteer and, on rare occasions, additional liabilities incurred by the strata company itself when such payments are made.  It generally comes down to whether the payment is a genuine honorarium or not.

In short – just because it’s labelled an ‘honorarium’ in the accounts, does not mean that the Australian Taxation Office (ATO) will see it that way.  As per the well worn cliché: If it walks like a duck, quacks like a duck, then it’s probably a duck.

  1. An honorarium is either an honorary reward for voluntary services or a fee for professional services voluntarily performed.  Genuine honorariums will normally have the following characteristics:
  2. The payment has no connection to the volunteer’s regular income producing activities or services;
  3. The payment is not legally required or expected;
  4. There is no obligation on the part of your organisation to make the payment;
  5. The payment is a token amount compared to the services provided or expenses incurred by the volunteer; and
  6. There is no element of periodicity, recurrence or regularity of such payments. 

No one factor in isolation determines whether a payment is a genuine honorarium or not.  It is determined based upon the balance of all facts.  The more of the above listed characteristics that are present in an arrangement, the higher the likelihood that the payment is a genuine honorarium.

From a tax point of view, it is in the volunteer’s best interests for any payments to be considered a genuine honorarium.  It is the difference between the payment being assessable income (ie: required to be included in their personal tax return) or being tax free.  From the strata company’s point of view, the determination is largely irrelevant unless the payments are clearly more in line with an employment or subcontractor arrangement for regular or professional services.  


Quick Tips:

  • The absence of an honorarium line item in the budget reduces the risk of the payment being considered ‘expected’;
  • When a payment is made to a volunteer, it can help to document in COO meeting minutes that the payment is not required to be made (ie: it is honorary), is considered by the COO to be a token amount compared to the benefits received and is a once-off payment being made in isolation of any other payments; and
  • Confirming that the volunteer does not receive payments from others for similar work in the form of employment or a business addresses one of the key determinants from the outset.


Ultimately, the question of whether the volunteer needs to declare the income in their tax return is a determination for the volunteer, as opposed to the strata company (via the CoO), to make and they should seek the advice of their own accountant if they are at all unsure.  


For more information, please contact the Ascend office via your strata manager.


- ATO: Honorariums

- ATO: Paying Volunteers


The above content is of a general nature and should not be relied upon as professional advice. Ascend encourages readers to seek advice from suitably qualified professionals in relation to their specific circumstances and not to rely solely on the information provided above.  Please contact our office for more information.

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