You may be asked by your not-for-profit organisation's volunteers whether payments to them are part of their assessable income.
Generally, receipts that are earned, expected, relied upon and have an element of periodicity, recurrence or regularity are treated as assessable income of a volunteer.
If a person’s activities are a pastime or hobby – rather than income producing – money and other benefits received from those activities are not assessable income.
A payment to a volunteer that is not assessable income will have many of the following characteristics:
- The payment is to meet incurred or anticipated expenses.
- The payment has no connection to the volunteer’s income-producing activities or services.
- The payment is not received as remuneration or as a consequence of employment.
- The payment is not relied upon or expected by the volunteer for day-to-day living.
- The payment is not legally required or expected.
- There is no obligation on the part of your organisation to make the payment.
- The payment is a token amount compared to the services provided or expenses incurred by the volunteer. Whether the payment is token depends on the full facts surrounding the payment and volunteer's circumstances.
Your volunteers can be paid in cash, given non-cash benefits or given a combination of both cash and non-cash benefits. These payments are given various descriptions, including:
- honorariums
- reimbursements
- allowances.
Sometimes they are given no name at all.
The name or description of the payment does not determine its treatment for tax purposes – it depends on the nature of the payment and the volunteer’s circumstances.
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Volunteers can be paid in cash, given non-cash benefits or given a combination of both cash and non-cash benefits. These payments have various descriptions, including honorariums, reimbursements and allowances. Find out if these payments are assessable income to the volunteer.