28 May 1997 External T.I. 9711055 - HONORARIUMS OR EX-GRATIA PAYMENTS

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

Are honorariums taxable and is withholding required?

Position:

Yes, withholding required if over $500

Reasons:

Employer's guide

	                          	71105
XXXXXXXXXX	                           C. Tremblay

Attention: XXXXXXXXXX

May 28, 1997

Dear Madam:

Re: Honorarium or Ex Gratia Payments

This is in reply to your letter of April 18, 1997, and further to our telephone conversation of May 13, 1997 (XXXXXXXXXX/Tremblay) wherein you asked us about honorariums and ex-gratia payments paid by XXXXXXXXXX mainly with respect to the fund raising events.

Any individual who works for a charitable foundation without necessarily holding an office or an elective position and receives money for such work under any heading whatsoever, including honorariums and ex-gratia payments, is taxable on the income received in the year of receipt.

The employer, including a charitable Foundation paying honorariums and ex-gratia payments, has to complete T4 supplementary slips for all individuals who received remuneration from the year if the remuneration was $500 or more for the year or if Canada Pension, employment insurance or tax deductions were required to be deducted from the remuneration. Generally, if an individual works more than 15 hours in a week, the individual is subject to employment insurance. The Income Tax Guide - Employer's Guide to Payroll Deductions has further details on withholding requirements and preparation of T-4 slips.

We trust our comments will be of assistance to you.

Yours truly,

for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch