Whale has already answered this more than satisfactorily. Posters note: There are only three Staratgurus on this website out of more than 1800 active members. They achieved that role by dint of reliable advice provided over a number of years, so they all deserve some respect.
But to reiterate the facts, I have heard of chairpersons who get paid illegally, and it’s usually because they bully their EC members into agreeing to it, nobody challenges it and there are no StrataKops who will come charging into their EC meetings to stop it. I have also heard of chairpersons who get paid because everybody appreciates the hours they put in and the hard work they do and they are terrified that they will just stop doing it if their time and effort aren’t adequately compensated.
But the law is quite clear on this, as linked to previously:
25 Can members of the executive committee be paid?
An owners corporation may pay to a person who is the chairperson, secretary, treasurer or a member of the executive committee such amount as the owners corporation determines at an annual general meeting in recognition of services performed by the person for the owners corporation in the period since the last annual general meeting.
In other words, if it’s done at all, it has to be done retrospectively and it has to be agreed by a majority of the owners at an AGM. This is different, by the way, from reimbursing the chair for reasonable expenses (phones, photocopying etc) but, again, that should be done retrospectively although it probably can be OK’d by the EC.
In my humble opinion, if the running of a building is so demanding that the chairman feels they should be paid illegally in advance, then may be time to think about getting a strata manager. At least he or she will know what they’re doing and carry professional indemnity insurance in case it turns out they don’t.
As Whale pointed out earlier, anyone who expects to get paid must carry the right insurances, at the very least. And i would add that any chairman who demands payment in advance hasn’t bothered to learn the basics of strata law and should be disqualified on that count alone.
And to answer the original question, as other have observed, it doesn’t matter if this is common practice or not – you can’t agree to pay any committee member for their work as a committee member until the AGM at the end of the year for which they expect to be paid.
The logic behind this is simple – if they have annoyed too many owners, they’ll get nothing and if they have their hand out at the beginning of their term, they don’t know the first thing about strata and they need to think about why they are volunteering in the first place.