Honoraria Policy and Procedure
- Last updated: October 2, 2019
In general, remuneration for services rendered to Calvin shall be made through the payroll system and individuals who perform the services will be considered employees.
Without exception, individuals retained to serve as instructors are employees of Calvin and therefore must be compensated through the payroll system. This includes regular courses, interim courses, mini courses, summer courses, tutorial courses, workshops, sectional and private lesson instructors in the music department, camp instructors, camp assistants, and coaches.
Also without exception, individuals already in the employ of Calvin College will be paid through the payroll system for any compensation for services rendered above and beyond the person's employment contract. This will be true even if the compensation would otherwise qualify for payment through Accounts Payable if the person was not already in the employ of Calvin College. The Human Resources website provides signature guidance for payments to current employees above and beyond the individual's employment contract.
Remuneration for certain services to individuals who are not employees of the College may be paid through the Accounts Payable system provided the payment meets certain tests and criteria as outlined in the IRS code. These kinds of payments will be known as honoraria for purposes of this policy document. IRS Revenue Ruling 87-41 provides a list of twenty factors that are to be considered. The degree of importance of each factor varies depending on the nature and factual context in which the services are performed. The payroll vs. honoraria decision can be quite involved and unfortunately does not lend itself to a brief, concise policy statement. Rather than attempt to distill the IRS guidance into a generalized Calvin policy, a list of Payroll/Honoraria Examples has been compiled. The lists include various issues that have been researched to date and categorize them by payroll and honoraria. New issues that arise will be researched and added to the lists. If there is disagreement over the interpretation of the IRS regulations, the facts and circumstances will be given to Calvin's tax accountants whose recommendation will become Calvin policy.
It is important to note that honoraria payments are taxable transactions to the recipient. The College is required to report cumulative honoraria payments in excess of $600 per calendar year to the IRS via form 1099. Cumulative payments less than $600 are still includable in the recipient's taxable income even though they are not reportable to the IRS.
Honoraria should be requisitioned on a properly prepared AP Payment Request Form. Please note that the individual's address and social security number must be obtained before the check will be written.
Obtain verbal approval from the budget officer (or supervisor if the purchaser is the budget officer) prior to making arrangements with the individual who will render the services.
If there are any questions as to whether the individual should be paid through payroll or Accounts Payable, please resolve the matter with the Financial Services Office before the individual is engaged to perform services for Calvin College. The Financial Services Office is given the final authority to ensure that payments are made in accordance with applicable laws and regulations. Arrangements made by departments without consulting with the Financial Services Office and later found to be out of compliance with institutional policies/IRS regulations can put all parties involved in an awkward situation.
Prepare an AP Payment Request Form according to the instructions on the form. Please note that the individual's address, social security number, and description of the type of service rendered are required before the check will be issued.
NOTE: If an individual is not a U.S. Citizen, a W-8BEN form will need to be completed.
Prepare a Travel Expense Report for any mileage, lodging, meals and other travel related expenses to be reimbursed on the AP Payment Request Form.
Attach the Travel Expense Report to the AP Payment Request Form along with original receipts if there are travel or other reimbursable expenses.
Sign name at bottom of the form.
Obtain budget officer's signature at bottom of statement. If the budget officer is the purchaser, then the budget officer's supervisor should provide the second signature.
Submit form to Accounts Payable in the Financial Services Office. The check will generally be ready by Tuesday or Thursday following receipt of the request form. The check will be distributed per the requisitioner's instructions on the form. If the check is required within a tight time-frame, it is advisable to hand deliver the requisition to Accounts Payable and mention the desired date on the form.
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