Honorariums in Australia 2025: Tax, Legalities & Best Practice

Whether you’re on the board of a community club, managing a not-for-profit, or volunteering at a major event, you’ve probably come across the term honorarium. In Australia, honorariums are a way to say ‘thank you’ for voluntary service, but confusion often surrounds how they work, their tax implications, and what’s changed in 2025. Here’s a deep dive into how honorariums fit into Australia’s financial and regulatory landscape this year.

What Is an Honorarium and When Is It Used?

An honorarium is a token payment made to someone for services where payment isn’t required or expected. Unlike wages or fees, honorariums typically recognise voluntary or one-off contributions—think guest speakers at a conference, committee members of a local sports club, or people who go above and beyond in a volunteer role.

• Not a salary: It’s a gesture, not an employment contract.
• Common recipients: Community leaders, board members, guest lecturers, event volunteers.
• Typical amounts: Usually modest—often between $50 and $500, depending on the organisation and event.

For example, in early 2025, several large sporting clubs in Sydney and Melbourne updated their honorarium policies, capping annual payments to committee members to align with new transparency requirements under the Australian Charities and Not-for-profits Commission (ACNC) guidelines.

Honorariums and Tax: What’s New in 2025?

The Australian Taxation Office (ATO) has always drawn a line between true honorariums and disguised wages. In 2025, increased scrutiny and digital reporting mean organisations must be more careful than ever:

• For recipients: Honorariums may be taxable income if they’re regular or expected, or if the recipient provides a service that would normally attract a fee. For genuine, one-off thank-yous, the ATO may allow the payment to be tax-free.
• For organisations: If the recipient is an employee or the honorarium is paid in return for work, PAYG withholding and superannuation may apply. The ATO’s Single Touch Payroll system now flags repeated honorariums, prompting review.
• Record-keeping: From July 2025, all not-for-profits must report honorarium payments over $250 annually on their ACNC annual statements.

Practical example: A guest speaker at a Brisbane university receives a $300 honorarium for a one-time lecture. If the speaker isn’t a regular staff member and the payment isn’t expected, it’s likely to be a genuine honorarium. But if a club treasurer receives $2,000 each year for ‘services rendered’, the ATO may reclassify that as taxable income.

Legal and Practical Considerations: Getting Honorariums Right

Beyond tax, there are legal and reputational factors to consider. In 2025, Australian organisations are under pressure to demonstrate good governance and transparency, especially when using donated or grant funds.

• Policies matter: Organisations should have a clear honorarium policy—outlining when, why, and how much will be paid, and who approves it.
• Transparency: With increased scrutiny from the ACNC and major grant-makers, clubs and not-for-profits must disclose honorarium payments in annual reports.
• Insurance: Honorarium recipients may be covered under volunteer insurance, but excessive or regular payments can jeopardise this status. Check your policy in 2025, as several major insurers have tightened definitions of ‘volunteer’ this year.
• Conflict of interest: Payments to committee members can create perceived or actual conflicts. Best practice is to document the decision and ensure the recipient leaves the room when their payment is discussed.

Case in point: In March 2025, a Victorian community theatre group faced a funding review after failing to disclose honorariums to its board. The lesson? Transparency and clear policies are crucial.

Best Practices for Honorariums in 2025

To avoid legal headaches and ensure your organisation stays compliant, keep these best practices in mind:

1. Limit frequency and amount: Keep payments occasional and modest.
2. Document everything: Record who approved the payment, the rationale, and the recipient’s role.
3. Communicate clearly: Let recipients know whether the payment is taxable and if it could affect their Centrelink or tax status.
4. Stay up to date: Review your policies annually to reflect the latest ATO, ACNC, and insurer requirements.

Honorariums are a valuable way to recognise contribution, but they must be managed with care in 2025’s more regulated environment.