Summary

In 2009, the Taxation (International Taxation, Life Insurance, and Remedial Matters) Bill introduced changes to reimbursement and honorarium payments made to volunteers.

Reimbursement payments that are based on actual expenses incurred by the volunteer in undertaking voluntary activities are now tax-exempt, provided the payment is made separately from honoraria.

Honorarium payments continue to be taxed at the following rates:

• Normal rate = 0.33
• Rate if no tax code declared = 0.48

Reimbursements

Allowances for reimbursement payments to volunteers should use the following setup:

• Type = "A. Allowance"
• Paying = "Yes"
• Taxable = "No"
• All fields on Details (iii) tab = "No"

Honoraria

Allowances for honoraria payments to volunteers should use the following setup:

• Type = "A. Allowance"
• Paying = "Yes"
• Taxable = "Yes"
• Tax Override = "Yes"
• Tax override rate = "33.00"

  Note: Employees without a declared tax code are taxed at 48.00.

• Tax override type = "W. Schedular Payments"
• All fields on Details (iii) tab = "No"

Combined payments

If you have allowances that are used for reimbursement and honorarium payments, then you need to:

• Stop using these combined allowances
• Set up new separate allowance records as shown above.