Board member honoraria and expense reimbursement
School board members do not get paid for their work as such.
But they can receive a particular type of payment to cover the cost of attending board meetings.
These payments are called honoraria (one payment is called an honorarium.)
Keep reading to learn more.
How much should the payments be?
Your board sets the honoraria amount to be paid to individual members.
When deciding how much to pay, you must consider the potential loss of earnings and/or childcare costs for members to attend board meetings.
Your board may also choose to reimburse other expenses in addition to honoraria payments, such as travel costs for attending a professional learning and development workshop.
In your board policies, you should specify the honoraria amount and approach to reimbursing other expenses to individual members.
Are honoraria payments taxed?
It depends.
Honoraria are treated as “schedular payments” (payments made to a person who is not an employee) and are usually taxed at 33%.
However, the Inland Revenue Department (IRD) allows school board members to receive a limited amount of honoraria before withholding tax is deducted.
For the presiding member, the first $75 paid per board meeting is exempt (up to a maximum of $825 a year).
For all other board members, the first $55 paid per board meeting is exempt (up to a maximum of $605 a year).
Any payment above these amounts must have withholding tax deducted.
Most boards set their honoraria payments at these tax-exempt rates.
Are reimbursed expenses taxed?
No – provided they’re based on actual expenditure or a reasonable estimate of the likely cost.
How should the payments be made?
It is good practice for the school to process honoraria payments and expense reimbursements separately.
Otherwise, the full payment could be treated as an honorarium and withholding tax may be applied.
If the school chooses to make a combined payment to a board member, they must clearly identify which part of the payment is an expense reimbursement and which is an honorarium.
If in doubt, the person responsible for processing honoraria and reimbursing expenses should seek advice from the Inland Revenue Department.
When should board members receive their payments?
It’s up to your board to decide how often payments are made.
Most honoraria payments are made at the end of each school year but could be made as frequently as after every board meeting.
Expenses could be reimbursed monthly or on an ad-hoc basis as they are incurred.
Your board should regularly review how often payments are made to ensure the frequency still meets the needs of each member.
Keep your policy flexible, so the payments can be made to different members at different times (if required).
Can boards choose not to pay the honoraria?
All board members are entitled to these payments (including the principal, staff, and student representative).
A board should never pass a resolution stating that its members will not.
Some board members, however, choose to have their payment automatically donated back to the school.
Questions your board could ask
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Have we discussed how much our honoraria payments are and when they will be paid?
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Does the amount set properly reflect the potential loss of earnings and/or childcare costs for board members?
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Have we discussed our approach to reimbursing other expenses to board members?
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Are we prudently using board funds?
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Have we documented our decision in our minutes and board policies?
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Do we regularly review our policy to ensure it still meets the needs of our members?
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Does the school clearly identify the expense reimbursement and honorarium portions of combined payments?
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Is the school correctly applying withholding tax to honoraria payments above the exempt amounts?
Templates, resources, and references
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Education (School Boards) Regulations 2020
Inland Revenue Departmen