Remuneration to trustee, Market rate

1) This question is about to "whether (a) a trustee, and (b) a trustee who is also secretary, can receive remuneration from a trust. (information about concerned society/trust is in pt. no. 6)

2) Have searched here on the subject and found expert's useful replies, majority of the experts have answered it as (a) "Yes", "Provided, the trustee or a trustee who is also a secretary are working full time." (or 'part time'. pl. note, I haven't found part time word used in an answer here, it's my opinion. Pl correct if misunderstood or misinterpreted.) (b) "Just being a trustee, doesn't qualify for a remuneration or a salary".

3) Some answers say, (a) The deed should mention/allow this, if it's not present in the deed, amendment, change report, etc. formalities must be completed. (b) A committee meeting should be held, the proposal should be discussed, decision is taken, and in the following meeting the decision is accepted and resolution is passed, and can take effect as decided.

My query: In my case, the deed is silent on this remuneration part, nothing is mentioned. In such a case, which of the above 'a' or 'b' options is appropriate, or some other way is available while adhering to the law.

4) The answers also mention, "The remuneration should be according to 'market rate', and remuneration can be lower, but not higher than market rate."

My query: We have found the 'market rate' or 'reasonable remuneration' is trickiest thing to find or decide on. Can you share some references or credible links to find 'market rate'. Kindly advice. Options we considered to calculate remuneration: (a) The remuneration can be about 5% lower than highest paid single employee. (b) The remuneration can be about 50% to 80% of the combined salary of the three heads. (c) The remuneration can be based on some % of total combined gross salary of all the employees. (d) The remuneration can be based on some % of total yearly gross income (before any expenses deducted), of the society/trust.

5) My query: (a) If remuneration is allowed, how it has to be treated/accounted? (b) like an employee's regular salary, (with P.T; P.F; TDS, etc. applicability), or (c) just a flat honorarium)

(Your opinion/advice can be based upon the following information)

6) The society /trust / trustee / secretary in the case is- (a) The Society is based in Maharashtra. (b) It's an educational society, (running a school, un-aided, govt. recognised.) (c) Registered under societies act, and also under BPT act. (d) One of the trustees who is also working as a full time secretary (full time on site presence), looking after general administration, staff, accounts, salary, meetings, minutes, AGM, necessary compliances with various govt agencies, and such day to day work. The trustee+secretary has to look after section/department heads:3, + staff:40, +student strength: 800+ (e) Another trustee is working part time (part time or more, on site presence and outdoor work).

Kindly advice.

(We understand, that based on above information, arriving at a conclusive and absolute decision or advice is difficult. We will take your opinions/advice as guidelines from subject experts like all of you.)

Thanks all in advance!

Great detailed query! Let me break down the key points on remuneration to trustees (especially those also serving as secretary), and how to decide and treat such remuneration, based on your situation:

1. Can a Trustee or Trustee-Secretary receive remuneration?

Simply being a trustee does NOT automatically entitle one to remuneration.
Trustees are often volunteers and receive no pay just for the title.
However, if a trustee also performs significant operational/administrative work (like a full-time secretary managing day-to-day affairs), then remuneration can be justified.
The trust deed or society’s governing documents must expressly permit remuneration to trustees or office bearers.
If silent, formal amendments or resolutions are needed.

2. Since your deed is silent, what next?

You will need to amend the deed or pass a resolution in the governing body/committee meeting authorizing such remuneration.
This is essential for legal and audit compliance, especially since it’s an educational society registered under the Societies Act and BPT Act.

3. How to decide a “Market Rate” / “Reasonable Remuneration”?

There’s no fixed statutory formula, but common industry practices and guidelines are:

Remuneration should be commensurate with responsibilities, experience, and workload.
Should not exceed what a similar role in the market would earn (to avoid issues with donors, auditors, or regulators).
Your suggested approaches are good starting points:
- 5% lower than the highest-paid employee — reasonable if the trustee-secretary’s role is of similar complexity.
- 50-80% of combined salary of heads — could work if those heads are the immediate reporting managers.
- % of total gross salary or income — can be less precise but used in some societies.
Check salaries of similar roles in comparable educational societies/schools in Maharashtra or nearby regions.
Consult industry salary surveys or NGO salary reports (sometimes available online or via professional consultancies).
Consider input from auditors or legal advisors familiar with NGO norms.

4. How to treat and account for this remuneration?

If the trustee-secretary is an employee under contract (full-time with fixed duties), then:
- Treated as salary.
- Subject to Professional Tax, Provident Fund, TDS on salary, and other statutory compliances.
- Monthly salary with pay slips, PF registration, and annual Form 16.
If payment is a one-time or irregular amount without employment contract, it might be treated as:
- Honorarium (usually smaller, less formal).
- Still, TDS under Section 194J (Professional Fees) or 194C (Contract) may apply.
Given the descripttion, it seems the trustee-secretary is a full-time employee, so salary treatment is appropriate.

5. Additional points for your case

Since the society is an un-aided educational society, transparency and compliance are key.
Keep proper documentation — appointment letter, remuneration policy, meeting minutes approving remuneration.
Maintain separate accounting heads for remuneration to trustees/employees.
Regular auditor review and compliance with the Societies Act and BPT Act are essential.
If part-time trustees are paid, amount should be proportional to their time and responsibilities.

Summary Table

Query	Advice
Trustee remuneration allowed?	Yes, if actively working & authorized by deed or resolution
Deed silent on remuneration?	Amend deed or pass committee resolution to authorize
How to fix remuneration?	Based on comparable market salary, responsibilities & surveys
Remuneration nature?	Full-time trustee-secretary = salary with PF, TDS etc.; others can be honorarium
Compliance	Follow Societies Act, BPT Act & maintain transparency