Honoraria and Stipends: Payroll, T4A or Reimbursement?

A board approves $300 for the elder who opened the annual meeting, $50 a month for the volunteer who runs the phone line, and $2,000 for the summer student. All three get called honoraria, and the word does not decide the treatment of any of them. What decides it is what the payment actually is. This guide sorts the three buckets, explains what withholding and reporting each one carries, and covers the amount everyone asks about.

Is an honorarium taxable?

In the recipient's hands, generally yes, and potentially reportable by you. There is no CRA rule that makes a payment non-taxable because it was called an honorarium or because it was small, though taxable income can still fall below a payer's reporting threshold.

The word describes an intention, not a category in the Income Tax Act. Money paid to someone for doing something is income to them, and the analysis is which kind, and what you must do about it.

Two numbers get quoted as exemptions and neither one is. The $500 figure is an administrative reporting threshold for slips, not a point below which income stops being income. The $1,000 exemption people cite applies to payments to emergency services volunteers, and only where the payer is a government, a municipality or a public authority, which almost no charity is.

The safe starting position is that the payment is taxable to the recipient and potentially reportable by you, unless the analysis below puts it in the reimbursement bucket.

Which of three buckets is your payment in?

Reimbursement, employment income, or other income to a non-employee. Decide by substance, at the time you approve the payment.

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The reimbursement bucket has conditions of its own, and paying against receipts is not by itself enough to put a payment in it. That distinction, and the difference between a reimbursement, an allowance and an accountable advance, is covered separately.

The line between the second and third buckets is the classification question. If you direct what is done, when and how, you are probably looking at employment income however the payment was described when it was approved.

Decide at approval, not in February. The board minute is the natural place to record which bucket it falls in.

When is an honorarium employment income?

When it is paid for work performed under your direction, or to someone who already works for you. In either case it goes through payroll.

The clearest case is a payment to an existing employee. An honorarium to a staff member for extra duties is employment income, added to their pay, with the usual deductions and reported on their T4.

The harder case is the recurring payment to someone who is not on staff. A volunteer receiving $50 every month for running a programme, on a schedule you set, doing work you direct, looks like a person being paid wages, whatever the payment is called. The test is the working relationship, not the size or the label.

Frequency is a signal rather than a rule. One payment to a guest speaker is a different fact from twelve payments to the same person for the same continuing duties.

Where the answer is not obvious, the classification question can be settled with a ruling rather than guessed at, and the process for that is covered separately.

When does it go on a T4A instead?

When the payment falls within a category the T4A reports, and the person is not your employee. The T4A is not a catch-all for every non-employee payment; the amount has to fit a reportable category and meet that category's rules.

Fees or other amounts for services go in box 048 where the payments to that person exceed $500 in a calendar year, reported without GST or HST. An amount genuinely in the nature of other income rather than a fee for services is reported under code 028. Scholarships, bursaries and study grants go under code 105, and the payer reports the full amount even where the student may exclude part of it through the scholarship exemption.

CRA's administrative practice has been not to assess penalties for a failure to complete box 048, a moratorium introduced in 2011. It has since been lifted for the trucking industry. The practical conclusion for a charity is to complete the box rather than rely on a moratorium that is being withdrawn sector by sector.

Get the recipient's information at the time you pay, not in January. A name, address and social insurance number or business number collected before the cheque goes out is straightforward; collected eleven months later it is a series of phone calls.

What about board members and directors?

Fees paid to a corporate director are employment income, reported on a T4. They are not a volunteer thank-you and they are not an honorarium in the loose sense.

The withholding follows from that. Deduct Canada Pension Plan contributions from fees paid to directors of a corporation employed in Canada, prorating the basic exemption over the number of times you pay the fees during the year. Do not deduct employment insurance premiums from directors' fees; where you pay the same person both a salary and directors' fees, deduct employment insurance only on the salary portion. For income tax, where you pay directors' fees alone and estimate the total will not exceed the amount claimed on the director's TD1, do not deduct; where you estimate it will exceed that amount, you have to deduct.

Two qualifications. Where there is an employment relationship between the director and the organisation, the contribution and premium questions turn on the director's employment status, and a ruling settles that if you are in doubt. And a ruling determines status, pensionability and insurability only; it does not answer the separate T4 and income tax questions, which you still work through.

There is a separate point that matters more to most charities. Whether your directors may be paid at all is a governance and provincial law question, not a tax one, and many organisations’ governing documents restrict it. Check that before the tax treatment, because the answer may be that the payment should not be made. 

A reimbursement of a director's actual expenses for attending a meeting is a different thing again, and your annual return asks a specific question about payments to directors that were not reimbursements or allowances.

Is there an amount small enough to ignore?

No amount makes a payment non-taxable to the person who received it. The thresholds that exist are about slips, not about tax.

The $500 figure that gets quoted is a reporting threshold. Below it, in defined circumstances and where nothing was withheld, a slip may not be required. The income is still income.

The emergency services volunteer exemption of up to $1,000 is real but narrow. It applies where the payer is a government, a municipality or a public authority and the individual performs the duties of certain emergency services workers on a volunteer basis. A community charity paying its own volunteers is outside it.

Near-cash substitutes do not change the answer either. Handing someone a gift card instead of cash does not convert a payment into a gesture; value it and run the same analysis.

The honest thing is to tell people before they accept. A volunteer who is told in advance that a $300 honorarium is taxable income to them can decide whether to take it, and nobody is surprised by a slip.

How should honoraria sit in your books?

In accounts that match how they will be reported, with the decision recorded when the payment is approved. Day-to-day charity bookkeeping is where February gets easy or hard. 

Stipends to programme participants and students are their own category and should not be swept in with speaker honoraria. A scholarship, bursary or research grant paid to a participant is reportable under its own rules and in its own box, and the position should be confirmed against CRA's current T4A guide before the first payment rather than at slip time.

Keep honoraria out of the general programme expense accounts. Employment income belongs in compensation, other income to non-employees belongs with fees and contract payments, and reimbursements belong with the underlying expense.

For a registered charity, the Schedule 3 question is about employees. The compensation definition covers salaries, wages, commissions, bonuses, fees, honoraria and benefits paid to employees, and it excludes reimbursements of expenses incurred while working for the charity. So an honorarium paid to a staff member is Schedule 3 compensation and an honorarium paid to a guest speaker who is not your employee is not, even though both may be called the same thing in the minutes. Employee amounts then allocate across the functional expenditure lines with the rest of your payroll; non-employee amounts sit with fees and contract payments.

For a nonprofit that is not a registered charity, there is no T3010 and no Schedule 3. Remuneration, including honoraria, is reported in Part 4 of the T1044 where that return is required, along with the number of members and the number who received remuneration.

Keep a simple register: who, how much, what for, which bucket, which slip, and the date of the board approval. Building that into the account structure once means the year-end question answers itself, and the pitfalls that follow from an unrecorded decision are avoidable. Getting the payment classified and coded at approval is part of what our scope of service covers.

Frequently Asked Questions

Is there an amount below which an honorarium is not taxable?

No. The $500 figure is a threshold for issuing slips in defined circumstances, not an exemption. Income remains income to the recipient regardless of the amount.

Our volunteers get $50 a month toward their phone. Is that an honorarium?

It depends on whether it repays a cost they incurred for the organisation or is a flat amount they do not account for. Those are different treatments, and the difference is covered separately.

We give speakers a gift card instead of cash. Does that change anything?

No. A gift card is a near-cash substitute for payment. Value it and apply the same analysis you would apply to cash.

Someone receives an honorarium every month for the same duties. Does that matter?

Yes. A recurring payment for continuing duties you direct looks like employment income, whatever it is called. Settle the classification rather than relying on the label.

Do honoraria count as compensation on the T3010?

For a registered charity, only where they were paid to an employee. Schedule 3 compensation covers fees and honoraria paid to employees and excludes reimbursements. An honorarium to someone who is not your employee is not Schedule 3 compensation.

Can a nonprofit that is not a charity pay honoraria?

Yes, subject to its governing documents and to the rule that it must not make its income available for the personal benefit of a member. The payroll and reporting analysis is the same, and questions on particular arrangements are the kind we take on our FAQ page.

This article covers how a Canadian charity or nonprofit should treat honoraria and stipends as at September 2026, following CRA's directors' fees page as modified 23 April 2026 and its reporting guidance. Where a director's employment status is in question, a Canada Pension Plan and employment insurance ruling settles status, pensionability and insurability but not the separate T4 and income tax analysis. Reimbursements, allowances and accountable advances are covered separately.