Churches should establish a policy concerning honorariums that includes when and when not to give an honorarium and the appropriate amount.
An honorarium is a payment made to a person that does not represent full compensation for the time and effort expended. It may also be a payment for which a fee is not traditionally or normally charged. An honorarium is a payment made voluntarily by the church as a fee for a service that is not formally invoiced, when the value of the service exceeds what the charity can pay or when an employee or volunteer is asked to do something beyond their normal duties.
Examples of honorariums would be for guest speakers, singers, musicians and guest worship leaders. Such payments should be drawn from a budget category and not require a special appeal. In these situations, the person providing the service is considered to be self-employed and is expected to self-declare the money received as income in their tax returns.
There may be an occasion where the church has the opportunity to bring in a non-budgeted guest speaker. This may involve a special appeal or offering where the money raised will cover a payment to the guest speaker. The church should have a pre-determined upper limit on the honorarium paid to the guest speaker, even if more money is raised than what is needed to fund the honorarium.
Generally, the honorarium will be standard for all guests with consideration to adding to the normal honorarium in instances of more than normal travel.
Representatives of FMCiC that are guests at the church as speakers do not receive an honorarium. They are there as part of their job.
Generally, a gift from the church to an employee is a taxable benefit. This means for example, a “love gift” at Christmas would be a taxable benefit and is to be reported as income on the employee’s T4. A non-cash gift or gifts with a fair market value of up to $500 per year is non-taxable. If the amount exceeds $500, the excess amount would be taxable.