Definition and General Information
An honorarium is defined as a gratuitous payment to an individual for his or her participation in an activity for which no fee is legally required, and when no contractual obligation exists, such as lecturing, teaching, and sharing knowledge. An honorarium is a one-time payment to an individual (not a corporation, business, or partnership) who is not a current or recent employee of the University for a special and non-recurring activity of which the individual is known as an authority or expert in the field of endeavor to recognize or acknowledge the contribution of gratuitous services to the University.
The payment of an honorarium is entirely at the discretion of the University, which is not obligated legally or by tradition to make to such payments. Payments for more than nominal amounts or for services performed over an extended period of time should be treated as services that the University would be required to pay as an additional employee job or as an independent contractor fee for service through Procurement, depending on the individual’s relationship to the University. The payment of an honorarium is limited to a nominal amount per event or activity. Exceptions require approval by Tax Administration.
Example activities for which an honorarium may be paid include the following:
• A special one-time lecture for which the individual has no responsibility for grading or taking class attendance
• Guest speaker for an educational event, seminar, workshop, or other similar function
• Panelist for an educational event, seminar, workshop, or other similar function
• Appearance at an event by a recognized authority in a particular field of endeavor
Determination of Honorarium Payments
• Is the individual a business, corporation or partnership?
• Is this activity the individual’s main source of income?
• Was the payment amount negotiated between the University and the individual?
• Is there a contractual agreement (includes an informal service agreement)?
• Did the individual submit an invoice for payment?
• Does the individual expect to be paid for the service or set the price?
• Are the individual’s services recurring?
• Is the individual a current employee or student employee or been employed within the last 12 months?
• Is the payment more than a nominal amount?
• Is the payment for any service involving peer review, research boards, or committees?
If you have answered "yes" to any of the above questions, the payment does not qualify as an honorarium.
Information Required to Process Payments
As honorariums are a common practice in higher education, the payment process of honorariums has been set apart from those independent contractors requiring a Purchase Order. As such payments to honorarium recipients can be paid unencumbered with an electronic Payment Request form (ePRF); a purchase order is not necessary. Honorarium recipients must first be set up as a supplier in OMNI to receive a payment. In order to facilitate this, the new Substitute Form W-9 and Vendor Authentication Process has been developed. The form, along with a job aid detailing its use, can be found on the Controller’s Forms website under Accounts Payable > Vendor Authentication Form.
If the honorarium recipient is a nonresident alien, the new Substitute Form W-9 and Vendor Authentication Process should not be completed. Instead, the department should contact Payroll Services directly. If the honorarium is on a project, the payment must be allowable per FSU and grant guidelines. Additionally, if the honorarium is less than $1,000 and on a project or grant, the ePRF must be manually routed to Sponsored Research Accounting for approval. Once the new Substitute Form W-9 and Vendor Authentication Process is complete and the supplier ID has been created in OMNI, the department should complete the Honorarium Certification Statement Form for submission to Disbursement Services.
Taxation, Reporting, Policy, and Travel Expenses
The IRS classifies personal services into two categories: those performed by employees and independent contractors. As such, an honorarium is considered taxable compensation to the recipient regardless of the amount. Per IRS regulations, the payment is reportable by the University and Form 1099-NEC will be issued to U.S. Citizens and Resident Aliens receiving payments totaling $600.00 or more per calendar year. As this payment is classified under independent contractor status, FSU does not withhold taxes to US Citizens and Resident Aliens. As a general rule, payments made to non-resident aliens (NRA) for honorariums are subject to a 30% withholding unless the tax rate is reduced or eliminated by the presence of a tax treaty. Honorariums to NRA individuals are reported on Form 1042-S Foreign Person’s U.S. Source Income Subject to Withholding.
Independent contractor status allows travel and lodging reimbursement under our accountable plan as provided in Treasury Regulation 1.132-1(b)(2). Therefore, travel and expense reimbursements processed by the Travel Office are paid under IRS accountable plan rules and are not considered taxable compensation to recipients. However, if a department combines an amount intended to reimburse travel and lodging with an honorarium fee, the individual should be informed that the entire payment would be reported as taxable compensation.
Procurement Services Policy 4-OP-A-6 defines an independent contractor as a person or firm who provides a service to FSU but does not have an employment or other relationship or connection with FSU as prescribed in Florida Statute 112.313. IRS Regulation 31.3402(e)-1 suggests that an individual should not receive both wages and independent contractor compensation during the same period of time from the same employer. For purposes of administering the Florida Statute, IRS Regulation, and FSU Policy prohibition, the University uses 12 months as a measure of this period of time. This means that an individual will not be approved as a supplier if the individual was previously employed by the University within the last 12 months. Exceptions to this rule must be approved by Tax Administration who will evaluate all of the facts and circumstances.
Peer Review and Research Board and Committee Member Services
For more information regarding the new process for peer review and research board and committee member services, see https://controller.vpfa.fsu.edu/services/accounts-payable/peer-review-and-research-board-and-committee-member-payments.