Payroll and PAYE


An honorarium is not a salary; it is by definition a ‘voluntary fee for a voluntary service’. HMRC defines honoraria as payment made to office-holders for doing something they are not rewarded for in any other way. Either the members in general meeting or the committee may grant such persons an honorarium in recognition of those services, provided the rules permit.

Many clubs assume that, due to the fact that honoraria are often of insignificant amounts, they are tax-free. This is not the case. Payments of honoraria, whatever the amount, are subject to Income Tax and National Insurance and must be included and dealt with in accordance with the rules of PAYE in the same way as the payment of wages or salaries to club employees. Straightforward payment or reimbursement of out-of-pocket expenses will not attract Income Tax.