Remuneration of the head of an association

For an association to be considered a non-profit organization, it must, in principle, be directed by volunteers. In other words, managers must not receive remuneration, direct or indirect, for their management and administrative activities.

However, it is possible not to apply this principle of volunteerism. An association may, under certain conditions, remunerate its director(s) in return for subjections imposed by their functions without calling into question its non-profit nature.

The following organizations may choose not to apply the principle of volunteerism and to pay their executive:

• Associations Law 1901
• Associations of Alsace-Moselle
• Recognized public benefit associations (ARUP)
• Foundations recognized as being of public utility (FRUP)
• Company Foundations

Only persons designated by the statutes to run the association (members of the board of directors, the board or the body acting in its place) may be remunerated.

The remuneration of the head of an association includes the payment of sums of money or the allocation of any other benefit.

Thus, remuneration includes the following elements:

• Remuneration paid in consideration for the exercise of the function of director
• Punctual remuneration for a specific mission
• Benefits in kind
• Gifts
• Refunds lump sums unused fees or advances in accordance with their purpose

There are 2 methods of remuneration for the head of an association:

• the system of ¾ of the minimum wage which applies to any association
• or the legal regime which concerns only associations with annual resources in excess of €200,000.

Reminder: in order for a director to be remunerated, this must be provided for by the statutes of the association and voted by a deliberative body of the association (for example, general assembly, steering committee).

The remuneration of an association executive is taxable on income under the same conditions as wages. They are subject to contributions from the general social security system.

The association that does not respect these devices loses its non-profit character and may be subject to commercial taxes (VAT: titleContent, business tax and territorial economic contribution in particular)

When an officer receives remuneration for an activity distinct from its managerial functions, it may be affiliated with general social security system, like an employee.

It depends mainly the actual nature of paid assignments.

An officer is considered to be an employee if the remuneration corresponds to:

• one precise and distinct mission its leadership role,
• one defined working time,
• of concrete responsibilities related to the remunerated service.

The executive functions themselves may remain voluntary; only paid work is considered to be paid employment.

To maintain its non-profit character, an association must guarantee a transparent management when it pays one or more directors.

The following rules must be respected:

• The possibility of remunerating an executive officer must be included in the articles of association (a statutory amendment is required if not originally planned)
• Remuneration must be authorized by a formal decision a competent body (e.g. general meeting, board of directors)
• The amount, nature and conditions of payment shall be defined and documented in a minutes Decision-making
• Remuneration must appear in the annual accounts of the combination (in a specific line or clearly identifiable entry)
• In case of significant or multiple remuneration, a detailed annex to the accounts should be added, enabling members and funders to be informed of the amounts and beneficiaries

These requirements ensure compliance with disinterested management, prevent conflicts of interest and allow the association to maintain its advantageous tax regime.