As a not-for-profit you may have volunteers contributing to your organisation on a regular or ad-hoc basis. Sometimes it can be confusing to understand the difference between employees or contractors, and your obligations to volunteers.
Although there is no legal definition of what a ‘volunteer’ is for tax purposes, a volunteer typically does not get regular remuneration or have a contract.
However a NFP organisation may give their volunteers cash, non-cash benefits or a combination of both cash and non-cash benefits. These payments are given various descriptions, including:
Generally if that income is earned, expected and relied upon, it is treated as the assessable income of a volunteer. However, if a volunteer’s activities are a pastime or hobby, then any money or benefits received would not be considered assessable income.
It also worth noting that if your organisation is registered for GST you may be entitled to claim GST credits for purchases made for volunteers, or when you’re reimbursing them for expenses.
To view the ATO article in full, click here.