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Policy: VII.R.13

Issued: January 24, 1994

Owner: VP for Management and Budget, Director of Procurement Services

Latest Revision: January 30, 2007

PAYMENT OF HONORARIA TO NON-EMPLOYEES

1.0 Purpose

This policy describes the circumstances under which the University will pay honoraria to individuals who are not employees of the University.

2.0 Policy [Top]

An honorarium is a token of appreciation paid to an individual for services performed for which payment is not required. The honoraria amount may not be set by the recipient.The services involved vary, but are generally associated with oral presentations made at University sponsored functions. The arrangement between the individual and the University is informal. It does not involve a contract, and invoicing is not required.

Honoraria seldom exceed $2,000. In the rare instance where an HONORARIUM IS TO EXCEED $2,000, PRIOR APPROVAL BY THE DEAN or VICE PRESIDENT IS REQUIRED.

UNIVERSITY FACULTY AND STAFF CANNOT RECEIVE HONORARIA FROM THE UNIVERSITY, EXCEPT THROUGH THE WAGE PAYROLL SYSTEM.

2.1 Procedures:

The department should process payment of an honorarium to an individual who is not an employee of the University on a Payment Voucher in the Integrated System, according to the procedures for Payment Vouchers provided on the Procurement Services website.

If the payment is associated with reimbursement for travel expenses, the travel expenses may be included on the same Payment Voucher requesting honorarium payment. Such travel expenses are subject to all University travel policies and procedures. In order to ensure correct tax reporting, it is essential that travel expenses and honoraria are each coded on the Payment Voucher with the correct expenditure type.

All Univerity Human Resources procedures dealing with such issues as tax ids, tax treaty claims, tax withholding, and travel reimbursements associated with payments to foreign nationals must be followed.

2.2 Foreign National Honoraria Recipients

For resident Aliens ("Green" Card and Substantial Presence Test Resident Aliens), tax withholding for honoraria payments is handled in the same manner as for a U.S. citizen. No withholdings will be performed, and earnings will be reported on Form 1099.

Honoraria payments to non-resident aliens will have federal income taxes withheld at a rate of 30%, unless such taxes are specifically exempted by an income tax treaty between the country where the alien previously lived and the U.S. A list of countries having tax treaty agreements with the U.S. can be found in IRS Publication 901 "US Tax Treaties".

Honoraria payments to foreign nationals may be limited by their type of visa. Academic honorarium payments to short-term, non-immigrant aliens (admitted to the US on temporary visas for business or pleasure or on a visa waiver) are subject to the restrictions and requirements set forth in Policy FIN-014 "Academic Honorarium Payments to Short-term, Non-Immigrant Visitors".

See also:

3.0 Definitions [Top]

NOTE: The following definitions are provided as aids in understanding this policy. The final authority at the University with regard to classification of all foreign nationals is University Human Resources.

A "non-resident alien" is a foreign national living and working in the United States who is not a US citizen or a resident alien.

A "resident alien" is a foreign national who either: 1) Is a lawful permanent resident of the U.S. by virtue of having been given the privilege, according to the immigration laws, of residing permanently in the U.S. as an immigrant (usually by issuance of a "Green Card"), or 2) Meets the IRS Substantial Presence Test.

A "non-immigrant alien" is a foreign national whose admission to the U.S. is based on a temporary visa for business or pleasure, or on a visa waiver obtained through the U.S. Department of State's Visa Waiver Program.

4.0 References [Top]

Procedure -- Payment Vouchers

5.0 Approvals and Revisions [Top]

Previous version in effect from 1/24/94 to 5/20/05 available in policy archive.

Previous version in effect from 5/20/05 to 1/30/07 available in policy archive.


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