An honorarium is defined as a payment for professional services for which custom or propriety forbids a price to be set. Payment is generally considered to be a token of appreciation for a service provided, rather than fulfillment of an obligation, and the service provided is often event-related, such as a performance or speaking engagement. Typically, honoraria are paid to guest speakers or lecturers as a gesture of good will and appreciation.
An honorarium is not based on an agreed amount between the individual providing services and the individual seeking services, as any agreed upon payment constitutes a contractual agreement. Furthermore, the service provided has no tangible deliverable products, such as a report, software code, an analysis, program review requiring the preparation of a written evaluation, etc., since this is considered a consulting arrangement and would probably be more appropriately addressed with an independent contractor agreement. If you require assistance determining whether or not a provider should be treated as an Independent Contractor, please follow the instructions on the Human Resources Web pages at Human Resources - Forms - Independent Contractor.
Kettering University students, faculty, and staff are not eligible to receive honoraria.
All honoraria payments to individuals* are reported as taxable income using Form 1099-MISC, Miscellaneous Income. (we are only required to file a Form 1099-MISC if the total payments to the individual exceed $600 in the calendar year.)
Payment of an honorarium of any amount is obtained by submitting an approved Funds or Materials Request (KU-4) form to the Accounts Payable Department. Such requests must include the recipient’s complete name, social security number, and address as well as the amount and purpose of the honoraria.
*Note: There are special withholding rules related to payments made to non-resident aliens. Please call Paul Gratsch at x7942 regarding these requirements at least 10 days prior to the performance or speaking engagement.