Professional Services Compensation

Honorarium

An honorarium is a monetary gift to outside persons who contribute their expertise to the enrichment of curricular and co-curricular educational programs. It is not a payment arising from a contractual obligation for services rendered. Honorariums cannot be used to pay UNC Asheville students, UNC Asheville employees, or employees of another NC state agency. All honorarium recipients must register via PaymentWorks for onboarding and electronic payments. Any University employee can send an invite via PaymentWorks.

To pay an honorarium, complete the Honorarium form and attach it to the Independent Contractor/Honorarium report type in Chrome River.

Independent Contractors

For federal employment tax purposes, the usual common law rules are applicable to determine if a worker is an independent contractor or an employee. Under the common law, we must examine the relationship between the worker and the business. All evidence of the degree of control and independence in this relationship are to be considered. The facts that provide this evidence fall into three categories – Behavioral Control, Financial Control, and Relationship of the Parties.

Please do not allow anyone to begin service until a determination is made. The IRS may assess penalties for misclassification of an individual providing services to the university. If an individual is determined by the IRS to be an employee instead of an independent contractor, the university may be held liable for the individual’s employment taxes, penalties, and interest assessed for not withholding income and employment tax, and a separate misclassification penalty.

To assist in this determination, UNC Asheville has created a checklist and process for campus. Following is the process with applicable contacts and forms links:

  1. The Independent Contractor Checklist is required and a determination of status made PRIOR to the completion of other forms and PRIOR to services being provided.
  2. The completed checklist should be submitted to:
    Hunter Fava
    Assistant Controller – Financial Operations
    117 Phillips Hall, CPO 1425
    hfava@unca.edu
  3. The checklist will be reviewed to determination the proper classification. Human Resources may assist if necessary.
  4. If the classification is determined to be an independent contractor, the department will complete the Independent Contractor Agreement form. The University employee working with the Independent Contractor will need to invite them to the PaymentWorks platform to ensure timely payment via ACH. The use of the standard UNC Asheville Independent Contractor Agreement, which has been approved by our legal counsel, is preferred. If the decision is made to use the vendor’s agreement, it must be approved by the university General Counsel:
    John Dougherty
    General Counsel
    217 Phillips Hall
    jdoughe2@unca.edu
  5. Attach the completed contract and invoice in Chrome River under the Independent Contractor/Honorarium report type. All independent contractor payments are now completed in Chrome River. If you do not see your vendor in Chrome River, please invite the vendor to PaymentWorks.
  6. If the classification is determined to be a temporary employee, the department will be notified and will need to work with Human Resources to complete the proper documentation.

4% NC Withholding On Nonresident Personal Services

North Carolina GS 105‐163.1 and GS 105‐163.3 requires income tax to be withheld at the rate of 4% from payments of more than $1,500.00 paid during a calendar year to nonresident individuals or nonresident entities for personal services performed in North Carolina in connection with a performance, an entertainment or athletic event, a speech, or the creation of a film, radio, or television program. Additionally, NC requires income tax to be withheld at the rate of 4% from payments of more than $1,500.00 paid during a calendar year to ITIN-Individual Taxpayer Identification Number (usually foreign national individuals) contractors for services provided within the State. See NC-30 for additional information. The 4% NC Withholding Tax is automatically calculated within the Independent Contractor/Honorarium report type within Chrome River.

Examples of Services Subject to 4% withholding:

  • Performances
  • Concerts/entertainment
  • Athletic Event
  • Speeches (includes any speech that amuses, entertains, or informs is subject to the
    withholding requirement. This includes instructors at seminars that are open to the
    public for an admission fee or are for continuing education.)
  • Creation of a film, radio or TV program
  • All services performed by an ITIN (Individual Taxpayer Identification Number)
    holder/contractor

Who is subject to the NC 4% withholding:

  • Nonresident Contractors
  • Nonresident Entities
  • ITIN (Individual Taxpayer Identification Number) Holders

PaymentWorks:

For either an honorarium or independent contractor payment, the vendor agrees to receive all payments from the University of North Carolina at Asheville via Automated Clearing House (ACH) direct deposit. Vendor shall provide accurate and complete banking information on the University’s required ACH enrollment form via the PaymentWorks platform prior to the issuance of any payments. Any changes to banking information must be submitted via PaymentWorks. Failure to submit updated banking information may result in delay or disruption of payment. The PaymentWorks platform uses security protocols and encryption standards to ensure the secure transmission and processing of payment and banking information.