Remuneration of the director of an association
Verified 01 January 2024 - Legal and Administrative Information Directorate (Prime Minister)
In principle, for an association to be non-profit making and exempt of commercial taxesHowever, it should not be profit-making and should be run by volunteers. We're talking about selfless management of the association. Are you wondering whether it is possible to pay a remuneration to the head of an association without calling into question the disinterested nature of its management and which organizations are concerned by this derogation? We present you with the information you need to know.
For an association to be considered a non-profit organizationIn principle, it must be directed by volunteers. This means that managers must not receive remuneration, directly or indirectly, for their management and administration activities.
However, it is possible not to apply this principle of volunteering. An association may, under certain conditions, pay its director(s) in return for subjects imposed by their functions without calling into question its non-profit-making character.
The following organizations may choose not to apply the principle of volunteerism and to remunerate their directors:
- Associations Law 1901
- Associations of Alsace-Moselle
- Associations recognized as being in the public interest (ARUP)
- Recognized Foundations of Public Benefit (FRUP)
- Company Foundations
Please note
the award of a grant or approval may be conditional on the absence of remuneration. This is the case, for example, for fisheries and aquatic protection associations if they do not comply with their statutes providing that the duties of the members of the bureau are free of charge.
However, such associations may be the subject of payments of allowances representative of expenses allocated by the board of directors.
Only persons designated by statutes to manage the association (members of the board of directors, the bureau or the body acting in its place) may be remunerated.
FYI
the association may also remunerate one of its members without calling into question its non-profit nature.
The remuneration of the head of an association includes the payment of sums of money or the award of any other benefit.
Thus, compensation includes the following:
- Remuneration paid in return for the performance of the duties of a director
- Ad hoc compensation for a specific mission
- Benefits in kind
- Gifts
- Refunds lump sums unused fees or advances in accordance with their purpose
FYI
reimbursement of expenses real incurred in the context of the associative activity and supported by an invoice or other supporting document shall not be taken into account. These may include train tickets, tolls, a declaration of the number of kilometers traveled with the personal vehicle,...
There are 2 methods of remuneration for the head of an association:
- the arrangements for ¾ of the Smic which shall apply to any association
- or the legal regime which concerns only associations which have annual resources exceeding €200,000.
Reminder: in order for a director to be paid, this must be provided for in the association's statutes and voted by a deliberative body of the association (e.g. general meeting, steering committee).
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General case
Any association may decide to remunerate all or part of its directors.
The remuneration of each director shall not exceed ¾ of the Smic: titleContent, or €1,325.19 gross per month.
Associations with resources over €200,000
An association, including the annual average of resources out of the 3 drills closed is at least equal to €200,000, may pay one or more directors more than ¾ of the Smic: titleContent if it fulfills the following 3 conditions:
- A majority of the ²/trois of the members decided on this
- Its statutes and operating conditions ensure its financial transparency, the democratic and periodic election of its leaders, and the control of its management by its members
- The amount of remuneration paid to each director shall be set out in an annex to the accounts of the association.
Public subsidies are not taken into account in the calculation of the average annual resources.
Remuneration is only possible from 4e year of existence of the association.
The number of executives who can be paid is limited. It varies according to the amount of annual resources:
Resources of the organization | Number of executives eligible for remuneration |
|---|---|
Enter €200,000 and €500,000 | 1 |
Enter €500,000 and €1 000 000 | 2 |
Beyond €1 000 000 | 3 |
The remuneration of each director must be proportionate to the work performed. It can't go beyond €11,592 gross per month.
If the same person is a director in more than one association, all of his remuneration shall be taken into account in assessing the €11,592.
The remuneration of an association manager is taxable on income under the same conditions as salaries. They are subject to contributions from the general social security scheme.
The association which does not respect these arrangements loses its non-profit character and may be subject to commercial taxes (VAT: titleContent, business tax and territorial economic contribution in particular)
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