Independent Contractors & Honorariums

WHO IS AN INDEPENDENT CONTRACTOR?

Individuals who are in an independent trade, business, or profession in which they offer their services to the general public are generally independent contractors. The general rule is that an individual is an independent contractor if the payer has the right to control or direct - only the result of the work - and not what will be done and how it will be done.

The earnings of a person who is working as an independent contractor are subject to Self-Employment Tax.

Examples of individuals who might meet the criteria for IC status are:

  1. Guest performers or artists who otherwise are not affiliated with the University.
  2. Guest Speakers or lecturers brought to the University for a very short duration because of their expertise.
  3. Individuals providing professional services who routinely hold themselves out to the public as providing such services for a fee. Examples include accountants, attorneys and medical providers.

According to the IRS, individuals who receive compensation of any kind (including honorariums) are classified as either employees or independent contractors and must be taxed appropriately. As the name implies, there must be a contract in existence between SU and the independent contractor describing the terms and conditions of the relationship.

It is critical that the University correctly determine whether the individuals providing services are employees or independent contractors.  The answers to the questions in this form will determine which category a payee fits into.

You may refer to Guidelines for Determining Independent Contractor Status for more detailed information on the importance of properly classifying Independent Contractors and a detailed list of questions to consider when making this determination. Refer to the paying a non-resident alien section when paying a person without a US citizenship for a service. 

To request payment for services performed, complete the Independent Contractor form in ProcureSU. The invoice, contract, and any other supporting documentation are required to be attached to the submitted requisition.  Payments to the contractor will not be processed until the service has been completed and all required information has been compiled.