You've no doubt heard a lot about the New Year Honours List and how important it is, but it's easy to get confused with all the different classifications.
Essentially, they pay homage to someone's service, integrity or extraordinary achievements and contributions.
Anyone can be nominated, and they are given to exceptional UK nationals or citizens from Commonwealth countries like Australia, New Zealand, Canada and Jamaica.
The list is made up of knights and dames, appointments to the Order of the British Empire, and valour awards to servicemen and women and civilians.
The Queen or another senior royal presents the recipient with their award at a formal ceremony later in the year.
Let's take a look at what the awards actually mean, and who's in line to be honoured this new year.
Knighthood and Damehood
These are bestowed by the famous touch of the sword and come from the days of medieval chivalry.
They are awarded for "having a major contribution in any activity, usually at national level" which is seen as "inspirational and significant, requiring commitment over a long period of time".
Men are styled "Sir" after the ceremony while women are named "Dame".
Recipients this year include sport stars Mo Farah, Andy Murray, Jessica Ennis-Hill, comedian Ken Dodd and photojournalist Don McCullin.
Orders of the British Empire
These were created during the First World War to reward servicemen and civilians in the war effort and the ranks run from Commander (CBE), Officer (OBE) and then Member (MBE).
People who make distinguished contributions to their field or carry out important national or regional roles which have a long-lasting impact on communities are appointed to the order.
Those in line for CBEs this year include boxer Nicola Adams, swimmer Adam Peaty, artist Chris Ofili and actress Naomie Harris.
Victoria Beckham, Wales football manager Chris Coleman and actor Tim Pigott-Smith will be made OBEs.
Meanwhile, antislavery ambassador Vanita Patel, the singer Marty Wilde and gymnast Max Whitlock will be made MBEs.
Companion of Honour
This is for those who have provided a "major contribution to the arts, science, medicine or government lasting over a long period of time".
It's an exclusive club, consisting at any one time of the sovereign - king or queen - and no more than 65 members.
On New Year's Day, Sir Roger Bannister, the first man to run a mile in less than four minutes, will receive one, as will the long-standing Liberal Democrat Baroness Shirley Williams.
Both will get the high honour of wearing the initials CH after their name.
There are also a raft of honours available to servicemen and women including in the form of the Queen's Police Medal and Queen's Fire Service Medal, and the Royal Red Cross for nursing achievements.
Community volunteers may also receive the British Empire Medal, while those who are recognised for services to the Royal Family can achieve the Royal Victorian Order.
While most people are thrilled to be recognised with an honour, there is a long line of celebrities and others who have refused to accept one.
This year, Hillsborough campaigner professor Phil Scraton declined his OBE in protest against the way the tragedy was handled.
He joins a long list of dissidents such as Danny Boyle, Stephen Hawking, John Lennon, Jon Snow, Paul Weller, Roald Dahl, David Bowie and Nigella Lawson.
There is also the spotty history of disgraced people who have had their honours stripped from them.
Anthony Blunt, who was the Queen's art adviser, had his knighthood revoked in 1979 after it emerged he was a Soviet spy.
More recently, Fred "the shred" Goodwin, the former Royal Bank of Scotland chief, had his knighthood stripped.
Broadcaster Rolf Harris lost his CBE after being convicted of sexual assault.
Watch out, Sir Philip Green.
Anyone can nominate someone for an honour by informing the Cabinet Office of their choice and their achievements.