Stipend: What Every Volunteer Should Know

Thinking about a stipend for your volunteer work? You’re not alone. Many groups offer a little cash or a reimbursement to cover costs, but the line between a helpful stipend and a paycheck can get blurry. Let’s break it down so you can stay within the law and still get the support you need.

When Does a Stipend Turn Into Wages?

A stipend stays legal when it only covers out‑of‑pocket expenses like transport, meals, or supplies. If you start paying a regular amount for the time you spend, tax agencies may label it as wages. That means payroll taxes, superannuation, and all the paperwork that comes with a job. The key test is whether the payment is a reimbursement or a payment for labor.

For example, if you volunteer at a soup kitchen and receive $10 a week to cover bus fare, that’s typically fine. But if the same kitchen starts giving you $200 a week no matter what you spend, you’re likely crossing into employment territory.

How to Set Up a Simple, Legal Stipend

Start by listing every cost a volunteer might incur. Keep receipts and ask volunteers to submit them with a short form. This way you can reimburse exact amounts rather than guessing. If you must give a flat amount, make sure it’s clearly labeled as a “travel allowance” and stay below any local threshold that triggers wage classification.

Another tip: separate the stipend from any other benefits. If you also offer free meals or training, treat those as non‑cash perks. This helps keep the stipend purely expense‑based in the eyes of regulators.

Don’t forget to check local laws. In Australia, for instance, the Fair Work Act has specific rules about volunteer reimbursements. A quick glance at your state’s volunteer guidelines can save you a lot of headaches later.

Most organizations also publish a simple policy on their website. Include a FAQ that answers questions like “What can I claim?” and “How quickly will I be paid?” Transparency builds trust and cuts down on confusion.

Finally, keep good records. A spreadsheet tracking who got what, when, and why is worth its weight in gold. If an auditor comes knocking, you’ll be ready.

By treating stipends as honest reimbursements and staying clear of wage territory, you protect both your volunteers and your organization. It’s a win‑win: volunteers stay motivated, and you avoid costly legal issues.

Paid Volunteers: Understanding What They're Really Called and How They Work

Paid Volunteers: Understanding What They're Really Called and How They Work

  • Aug, 7 2025
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Explore what paid volunteers are called, how they are different from traditional volunteers, and how organizations offer stipends or compensation.

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