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Not-for-profit volunteers

NFP organisations may need to pay different types of taxes and may be entitled to concessions, credits and refunds.

Last updated 14 June 2022

You need to understand the various obligations your not-for-profit organisation has concerning its volunteers.

Although there is no legal definition of 'volunteer' for tax purposes, a volunteer does not work under a contractual obligation for remuneration and would not be an employee or independent contractor. So, if any of your workers are not employees or independent contractors, they will be volunteers.

As a general rule:

  • Volunteers do not have to pay tax on payments or benefits they receive in their capacity as volunteers.
  • Not-for-profit organisations are not liable for pay as you go (PAYG) withholding and fringe benefits tax (FBT) on payments they make, or benefits they provide, to volunteers.

Find out about:

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.

As voluntary work is usually unpaid, most expenses incurred in voluntary work are not tax deductible. However, volunteers often donate money, goods and time to not-for-profit organisations. To be tax deductible, a donation must meet several requirements.

Your not-for-profit organisation must be registered for GST to claim GST credits on purchases for volunteers and reimbursements to its volunteers. There are some exceptions.

Your not-for-profit organisation must withhold amounts from payments to its volunteer for a supply of goods and services made in the course of their enterprise if they have not quoted their ABN.