Stipend (form of salary)
A stipend is a form of financial compensation typically provided to individuals in educational or training roles, such as apprentices, interns, or graduate students. Unlike traditional salaries, stipends are generally fixed sums intended to help cover living expenses rather than being direct payments for work performed. These payments can be one-time disbursements or offered in periodic installments, and they often accompany other educational benefits like job training or college credits.
Stipends are usually lower than regular wages, reflecting the dual purpose of supporting the recipient while they gain valuable skills and experience. Importantly, recipients may not be classified as employees and are often in temporary positions where the benefits of training outweigh the work performed. Various organizations, including nonprofits and educational institutions, may offer stipends to encourage participation in programs that serve public needs, such as volunteer work or research assistance.
Additionally, stipends are sometimes utilized in clinical research to compensate participants for their time and expenses. Overall, stipends serve as a crucial resource for individuals pursuing education and training, allowing them to focus on their development without the immediate pressure of earning a conventional salary.
On this Page
Subject Terms
Stipend (form of salary)
A stipend is a form of compensation generally paid to a person in a learning position, such as an apprentice, a trainee, or a student in an internship, a fellowship, or a graduate work position. Stipends are also known as payments, allowances, remunerations, and reimbursements. A stipend is typically a fixed sum and is intended to offset a person's living expenses while he or she is in training. A stipend may be a one-time-only payment, or it may be paid in periodical increments. Unlike a salary or wages, a stipend does not represent direct payment for work performed. For example, a stipend may be paid if the recipient of the training receives more benefits than the employer does.
Background
A stipend is usually less than a worker's normal wages because it is given in connection with other benefits, such as job training or college credit. A stipend often helps to cover living or daily expenses so that a trainee, an apprentice, or a student-worker does not have to find additional employment to help pay for his or her daily cost of living. A stipend may provide enough money so that the recipient can stay focused on the job that develops his or her education, skill, and work experience and increases his or her future earning potential.
To receive a stipend, a person must be working in a position in which the training or education that he or she receives from the employer is more beneficial than the work he or she performs for the employer. The employer is, in effect, providing a service to the trainee. The training or education that the trainee receives serves as part of his or her payment. An employer should be clear with the student, apprentice, or trainee at the start of the training period that no wages will be earned for the position.
A person receiving a stipend may not be classified as an employee. His or her position is considered temporary rather than permanent. The payment of the stipend enables a worker to be exempt, either in full or in part, from waged or salaried employment. Employers generally do not withhold federal or state income taxes or Medicare and Social Security taxes from stipends, so stipend recipients have the responsibility of reporting their stipends as taxable income and allocating funds to pay taxes on them at the end of the year. The person receiving the stipend may not hold a job or a position that displaces a regular, seasoned, paid employee. He or she may not be guaranteed a future position but may interview for one.
Overview
Stipends may be offered as compensation in a wide variety of situations. Nonprofit organizations may offer stipends to people doing necessary tasks on a near-volunteer basis. For example, AmeriCorps is a program that provides thousands of volunteers to nonprofit organizations across the United States. AmeriCorps participants are required to commit to a ten-month program. In exchange for their service hours, they receive a yearly stipend, medical insurance, and a place to live. The stipend allows them to cover their basic needs while they help their country and learn skills that will prepare them for future employment.
There are many examples of stipends in the university and collegiate settings. For example, student-athletes may receive stipend checks to help cover the costs of room, board, and travel while they are participating in college athletics. Teacher assistants, or TAs, may receive stipends for helping to teach undergraduate courses in their fields of expertise. Students may receive stipends for conducting research or assisting professors in classroom or research lab settings. PhD or doctorate students also often receive stipends as a form of compensation for their work or to cover their living expenses. Scholarship or fellowship stipends are generally offered to students through individual departments within a university and may include tuition payments and/or stipends for room, board, and other living expenses. Often these stipends are paid through grants, and they may require undergraduate or graduate students to participate in specified research in their chosen department. Most scholarship and fellowship stipend recipients must maintain a certain grade point average and must be enrolled in a certain number of undergraduate or graduate course hours to remain eligible to receive their stipends. Undergraduate and graduate students receiving stipends are still eligible for other state and federal aid.
Stipends may be given to workers training for high-need positions. For example, the Colorado Department of Education pays stipends to teachers who have attained National Board Certification and have taken jobs at low-performing, high-need schools in Colorado. The stipends are provided to compensate teachers for their out-of-pocket costs for obtaining National Board Certification and to attract some of the most highly trained teachers to schools that are in need of experienced educators.
Some clinical research studies offer stipends to participants. Clinical research study participants are individuals who are human subjects participating in clinical studies. These individuals are observed by researchers and doctors throughout the study. Stipends paid to clinical research participants are small and are typically paid to participants in an effort to compensate them for their lost wages, transportation, and food costs. Payments are generally made at the end of a study. Information about the payment amount and date of the payment is provided to participants in the informed-consent document that they are required to sign before the research study begins.
Interns, or people training for a job in a chosen field, may receive stipends to help them cover gas, food, housing, and other incremental expenses that they will incur during their internships. For example, the Department of Energy offers several temporary positions with a stipend. These opportunities are designed to teach interns about how the department works, give them hands-on training, and offer them the opportunity to meet and network with other people working within the Department of Energy.
Stipends are sometimes given for the successful completion of a training course or other coursework required to prepare to perform a job. For example, the US Department of Labor offers volunteer firefighters a stipend for completion of a volunteer firefighter training course.
Bibliography
"AmeriCorps." Corporation for National & Community Service, www.nationalservice.gov/programs/americorps. Accessed 5 Nov. 2024.
Brachmann, Steve. "How to Pay an Employee Stipend." Houston Chronicle, smallbusiness.chron.com/pay-employee-stipend-23277.html. Accessed 5 Nov. 2024.
“How PhD Students Get Paid.” Moody School of Graduate and Advanced Studies, Southern Methodist University, 16 Mar. 2023, gradarticles.smu.edu/advancing-the-field/how-phd-students-get-paid. Accessed 5 Nov. 2024.
"Payment to Research Subjects – Information Sheet." US Food & Drug Administration, www.fda.gov/RegulatoryInformation/Guidances/ucm126429.htm. Accessed 29 Dec. 2016.
Rawes, E. M. "Stipend vs. Salary." eHow, www.ehow.com/info‗8243759‗stipend-vs-salary.html. Accessed 5 Nov. 2024.
"Stipend-Based Internships." US Department of Energy, energy.gov/jobs/services/students-recent-graduates/stipend-based-internships. Accessed 5 Nov. 2024.
"Stipends and Fellowships." University of Texas at San Antonio, www.utsa.edu/scholarships/stipend.html. Accessed 5 Nov. 2024.
"Stipend Information." Student-Athlete Academic Services, University of Southern California, saas.usc.edu/financial-aid-and-housing/stipend-information/. Accessed 5 Nov. 2024.
Sky, Erin Michelle. "What Is a Stipend?" Quicken, 11 May 2021. www.quicken.com/what-stipend. Accessed 5 Nov. 2024.