USNH allows for the payment of an honorarium as a monetary token of appreciation for short-term activities or events where the University does not expect, nor is payment contingent upon, a particular result. The purpose of an honorarium is primarily to confer distinction upon or to symbolize respect, esteem or admiration for the recipient. It is paid as a non-negotiated one-time payment that is not legally required and is not provided in lieu of reimbursement of travel expenses. An honorarium and related travel expenses may be reportable to the recipient and IRS (see Section B.).
1. Honoraria or other payments for the purpose of conferring distinction or to symbolize respect, esteem, or admiration may not be paid from federally-sourced grant funds. The cost of professional and consultant services paid from restricted grant funds are allowable when reasonable in relation to the services rendered and are ordinarily arranged using an Independent Contractor Agreement.
2. Honoraria payments may not be negotiated by either the individual providing service or USNH. Negotiation of a set fee in exchange for a prescribed service taints the payment as wages rather than an honorarium and applicable federal and FICA taxes must be withheld. The individual authorizing the honorarium is responsible for deciding the amount of the honorarium which must be reasonable in light of the honor bestowed.
3. Approval is required by the Dean, Director or equivalent campus officer prior to payment. Proposed honoraria payments that are charged to restricted grant funds require the pre-approval of the campus office responsible for Sponsored Research.
4. Specific vendor codes are necessary as follows:
a. A vendor code must be set up for payees who are U. S. citizens or resident aliens prior to payment when the payment equals or exceeds $200.
b. Vendor codes must be set up for all honorarium payments to nonresident aliens, regardless of the dollar amount, if the foreign national comes to the U.S. and is honored for services performed in the U.S.
B. The procedures for reporting honorarium payments
1. Requirements for reporting and tax withholding depend on whether the recipient is an employee or non-employee, as well as whether the individual is a U.S. citizen, resident alien or nonresident alien. The reporting and taxation of payments to nonresident aliens are also based on whether the individual is honored for services rendered in the U.S. or abroad.
2. The Procedure 8-011F: USNH Request for Honorarium Payment Form may be completed to provide the information required to document the honorarium payment. Alternative documentation is acceptable so long as it contains all essential information to support the payment, including the appropriate approvals as outlined in Section A.3 (above).
3. Travel expenses reimbursed to an honorarium recipient follow Procedure Chapter 7: USNH Travel Policy (Chapter 7 of the procedure manual)
Any honorarium provided to employees as a token of appreciation (e.g., to faculty as a keynote speaker) for service unrelated to the faculty/staff base rate of pay is compensation. Payments are made through the Payroll system and are reported as Form W-2 wages subject to applicable tax withholding. The administrator engaging the employee for the honored activity must complete the Procedure 8-011F: USNH Request for Honorarium Payment Form. A campus 'Additional Pay Form' to request payment is not required. Due to strict federal regulations related to nonresident aliens, any honorarium paid to a nonresident alien must be pre-approved by the campus Human Resource Office or their designee as required by USNH HR policy at USY V.F.7.5.6 and USY V. F.10.7.
All honorarium payments to non-employees should be charged to Account Code 717210.
1. Payments to non-employees who are U. S. citizens or resident aliens are processed through the Accounts Payable system. If the payment is $200 or more, it is processed as a “direct pay” invoice and requires a vendor code; one-time payments of less than $200 may be processed as a “one-time direct payment” without a vendor code. Honoraria payments totaling $600 or more per individual per year are reportable on Form 1099-MISC. The administrator engaging the individual must complete the Procedure 08-011F: USNH Request for Honorarium Payment Form.
2. Payments to non-employees who are nonresident aliens.
a. Payments to nonresident aliens who are non-employees for services performed in the U.S. are subject to federal immigration restrictions based on their visa classification.
Generally, an allowable payment is subject to 30% income tax withholding unless 1. the recipient is a resident of a country with a treaty that exempts honorarium income from taxation, and 2. the recipient files Form 8233 with USNH Disbursement Services to claim the exemption. The payment is reported on Form 1042-S.
The Banner invoice document supporting the payment should include an indication that the individual is a nonresident alien, the location services are rendered (i.e., in U.S. or outside U.S.) and whether Form 8233 has been filed with USNH Disbursement Services. The originator must contact USNH Accounts Payable when a nonresident alien honorarium payment is being processed.
b. Payments to nonresident aliens who are non-employees for services rendered outside the U. S. are not subject to tax withholding or reporting. The place that services are rendered should be clearly documented on the request for payment.
The official version of this information will only be maintained in an on-line web format. Any and all printed copies of this material are dated as of the print date. Please make certain to review the material on-line prior to placing reliance on a dated printed version.