Honoraria vs. Service Agreements: Which strategy do I use to pay outside contributors?
Honoraria
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An honorarium is a token payment, or reward, made to an individual for a one-time service (e.g., a guest lecture) for which custom forbids a price to be set. Honoraria are issued as a courtesy, and may not be promised ahead of performance.Ìý
Honoraria that do not exceed $100 do not require the HNR form but must comply with all applicable university policies.
To authorize payment of negotiated services to an independent contractor, use the Scope of Work (SOW) form instead of the HNR form.
Honoraria are usually given as a token of appreciation for voluntary services that are not legally required to be compensated. Common situations include:
- Guest Lectures: When an individual is invited to give a one-time lecture or presentation.
- Panel Participation: When someone participates in a panel discussion or symposium.
- Workshops: For leading or facilitating a workshop or seminar.
- Special Events: For contributions to special events, such as award ceremonies or cultural events.
Service Agreements
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The University of Colorado Employee Services uses the scope of work form to determine if someone can be classified as an independent contractor. This determination is based on the nature of the relationship between the service provider and the university.
Service agreements are formal contracts used when there is a clear expectation of services to be performed, often with specific deliverables and timelines. These are typically used for:
- Consulting Services: When hiring an expert to provide consulting services over a period.
- Research Services: For conducting research or providing research-related services.
- Professional Services: Such as legal, accounting, or technical services.
- Training and Development: When hiring someone to provide training or professional development services.Ìý