Volunteer Compensation: What You Can Offer Without Breaking the Law

Running a church, charity, or community project means you rely on volunteers. But many organizers wonder: can I pay them? Should I give a stipend? How do I cover their expenses legally? The answers are simpler than you think once you know the rules.

When Can You Offer Stipends?

A stipend is a fixed amount given to help volunteers cover living costs. It’s okay as long as it isn’t tied to the number of hours worked and doesn’t replace a regular wage. Think of it as a modest allowance for travel, meals, or childcare. If the money is meant to offset out‑of‑pocket expenses, you’re usually safe.

Key tips:

  • Keep records of what the stipend covers – travel, meals, supplies.
  • Make sure the amount is reasonable for the cost of volunteering, not a full salary.
  • Provide the stipend after the volunteer submits receipts or a simple expense form.

Many churches use a small monthly stipend for youth leaders who travel to events. Because it’s not tied to a set number of hours, it stays on the safe side of the law.

Reimbursements vs. Wages: Stay Legal

Reimbursements are direct pay‑backs for actual costs. If a volunteer buys a bus ticket for a community outreach day, you pay them back the exact amount. This is 100 % allowed and doesn’t count as income.

Wages, on the other hand, are payments for time spent. Once you start paying per hour, you’ve created an employee relationship, and labor laws kick in. That means minimum wage, tax withholdings, and potential insurance obligations.

To keep things clear:

  • Ask volunteers to submit receipts before you reimburse.
  • Label all payments as “reimbursement” or “stipend” in your accounting.
  • Avoid any language that sounds like a salary – no hourly rates or guaranteed pay.

Some organizations also offer non‑monetary benefits, like free training, certificates, or access to community events. Those perks don’t count as wages and can boost volunteer morale.

Remember, the main goal of volunteer compensation is to make volunteering doable, not to replace a job. By covering travel, meals, or basic costs, you show respect for their time without crossing legal lines.

Finally, check local regulations. In Australia, for example, the Fair Work Act has specific guidelines on volunteer reimbursement. In the US, the IRS distinguishes between volunteers and employees based on control and compensation. A quick chat with a legal advisor can save you headaches later.

Bottom line: keep compensation transparent, tied to actual costs, and modest. Volunteers will appreciate the support, and you’ll stay on the right side of the law.

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

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  • 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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