An honorarium is compensation provided to someone in exchange for a service where payments are not conventionally made or required. For tax purposes, the payment often must be declared and treated as income. An example of a common situation where an honorarium arises is a conference where someone makes a speech. Speakers at conferences are not conventionally paid, but it is traditional to offer compensation to someone, often including transport and housing, in exchange for that person's participation in a conference.
For certain services, setting or naming a price is considered in poor taste, and an honorarium is offered instead. There may also be settings where people cannot formally accept compensation for something, as the payment might violate laws, but can take an ex gratia payment like an honorarium. Legal restrictions are often placed on acceptance of payments by people in political office to prevent issues like bribery, and when these individuals are asked to speak at events, compensation cannot be provided in the form of a conventional payment.
These payments can take a number of forms. Some people are simply offered cash for their services. Other payments may involve transport, food, housing, or other benefits. People can also be presented with objects of value as a form of compensation. In all cases, the honorarium is intended as a nod of respect to the person's social position and professional qualifications. While the person could offer services for free and may volunteer services without any expectation of compensation, the people benefiting from those services wish to express their thanks in a tangible way.
Conventions surrounding honorariums vary. Sometimes, people may be provided with information about such payments up front. In other cases, the payment is offered after the fact. In some cases, the payment may be given to the organization the person represents, rather than the person. This may be seen in cases like weddings, where people may donate money to the church rather than paying a religious officiant directly, depending on the established traditions of the wedding.
The tax implications of such payments vary. They may be considered taxable or nontaxable gifts or income, depending on the tax code. People who receive honorariums should consult an accountant to get advice on how to legally declare the payments. Tax authorities may allow people to accept a certain amount without declaring it, allowing people to take small payments without incurring tax liability.