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Handbook of Business Procedures

Date published: 
Last revised: 
Issued by: 

Nov. 23, 2010
Dec. 3, 2010
Contractor Services


Part 12. Independent Contractors - Table of Contents


A. Introduction

Payments to individuals are commonly referred to as stipends. Stipends include many types of payments, such as honoraria, fellowships, and travel reimbursements. The purpose for which the stipend is paid will determine the appropriate authorization required to make the payment.

B. Honoraria

An honorarium is defined as a payment given to a professional or famous person for services for which fees are not legally or traditionally required, such as addressing a conference. For example, guest speakers who visit the university may not require a fee, but the department may wish to provide a token payment as a form of appreciation for the services the guest provides. Honoraria are paid using *DEFINE VP2 documents and are authorized by one of the following means:

  • An Authorization for Professional (Individual) Services electronic PBS or paper APS is used for most traditional honoraria payments.
  • A formal contract must be used when special travel terms, such as first class, are required, or when the individual is accompanied by other people.

Note: Honoraria are not paid as a fellowship or travel reimbursement.

C. Stipends

1. Definition

Stipends can be defined in many ways:

  • A periodic payment such as a scholarship or fellowship granted to a student as support for the student's educational pursuits.
  • A fixed or regular amount of money paid as a travel reimbursement.
  • A payment for work if it is intended to compensate an individual for services performed.

2. Requirements

A stipend paid for work performed is authorized by an Authorization for Professional Services electronic PBS, paper APS, a formal contract, or a purchase order. A stipend has various requirements, depending on the purpose of the stipend.

  • A stipend that requires no work but which is used to support educational pursuits must be paid as a scholarship/fellowship using FRMS Scholarship/Fellowship.
  • A stipend for travel reimbursement will be tax free only if the university's travel reimbursement rules are followed and it is paid using a *DEFINE VP5 document.
  • A stipend which requires work must be paid as either an independent contractor or casual employee payment, based on the nature of the work and the degree of control exercised over the performance of the work. This type of stipend is paid using a *DEFINE VP2 or OV7 document. For more information, see Contractor Services.



Part 12. Independent Contractors - Table of Contents