An honorarium is a form of payment that is given even when there is no formal or legal need to provide compensation. It is a payment given ex gratia. In general, a payment is considered an honorarium if the service provided could have been given for free, or was voluntarily given.
In some cases, the compensation offered is called an honorarium even when payment is required or expected. This usually happens when it would seem impolite to name the price for the service rendered. Another instance when an honorarium may be necessary is when the individual may be restricted from accepting formal payment. This situation arises when the individual is in a sensitive position such that a payment can be mistaken for a bribe.
Honorariums can take on the form of cash, goods, or services. Cash is most often used, but other things such as transportation, housing, and other gifts may be given in lieu of money. Some people prefer non-cash honorariums as they go further from the idea of bribery. Instead, gifts seem to serve more as a sign of respect for the talent and service/s offered by the individual.
Usually, people who deliver a speech, lecture, or talk are given honorariums. Individuals who serve as a temporary official in an event are also given honorariums. Priests and other ministers can also receive honorariums for their services.
When it comes to tax issues, it is best to consult with a tax professional. Whether or not an honorarium should be taxed will depend on the nature and amount of the honorarium. It will also depend on your location and the rest of your taxable income.