What Is a Stipend, and When Are They Given?

A stipend is a fixed amount of money paid to individuals for services performed or expenses incurred while performing job duties. Stipends are typically given to people who are training or participating in internships or apprenticeships and aren’t receiving another form of payment for their time and work. Most stipends are less in value than regular pay or salary because they are given alongside other benefits like food, instruction, accommodations, or accreditation. For example, an intern may receive a monthly stipend to offset the costs of food and living while they participate in the internship.

Learn more: 5 Ways to Get ‘Free’ Money From Your Employer Without a Raise

There are a few key differences between stipends and salaries. The primary difference is that a stipend is given to support someone while undergoing training or learning and isn’t considered compensation for work performed. On the other hand, salaries are given to employees as compensation for their work. Additionally, stipends are not subject to payroll, state, or federal income taxes while salaries are. Salaries are subject to payroll tax withholdings and all income taxes required in the salaried employee’s location.

Another difference between stipend and salaries is that stipends are typically less than minimum wage. How much a stipend a person receives is up to the employer and is not required to meet the minimum wage requirements for their state. Employers often consider living expenses and other necessary costs the individual will incur when training or working at the company when determining how much of a stipend to provide.

Other differences between stipends and salaries include:

• Stipends are typically fixed monetary amounts while salaries tend to increase over time.
• Salaries are paid to employees on a company’s payroll, while stipends are paid to offset certain expenses and employees who receive them are usually not on the payroll.
• Stipends may come with additional benefits like funding for room and board, whereas salaries do not.
• Stipends are not based on how many hours are worked, while salaries are.
• Stipends are not taxed by the organization paying the stipend, so individuals are responsible for withholding their own taxes when receiving a stipend.

Stipends are most often given to individuals who do not meet the requirements to receive regular wages or salaries in exchange for services performed. The most common scenarios in which a person may receive a stipend include:

Research

Research assistants and other research professionals who are performing research duties for academic or training purposes may receive a stipend in exchange for their work. Common research projects eligible for stipend assistance include books, scholarly publications, studies, site reports, and translations. This type of stipend may be paid by the organization the research is being performed for or by a third party.

Career training

Some companies may give their employees stipends to offset the costs or time spent undergoing training related to their careers. For example, if an employee takes a training course, the company may provide a stipend to compensate the employee for the costs of the course. Employees may also receive stipends for specific job-related training, especially if the training costs the employee out-of-pocket expenses.

Church stipends

Some religions, such as the Catholic church, offer stipends to clergy and priests for performing church-related duties that they are not otherwise compensated for. For example, the Catholic Church provides a Mass Stipend to Catholic priests who perform Mass.

Fellowships

Fellowships are stipends or monetary awards given to students to help offset the cost of education. Fellowships may also be referred to as merit-based scholarships and are typically awarded at the graduate or post-graduate level. These awards are usually competed for and given to individuals based on their potential.

Wellness expenses

Some employers offer stipends to help employees pay for wellness expenses or programs such as gym memberships, mindfulness courses, and other costs related to improving the employee’s wellness.

Learn more: 13 Companies with Cool Wellness Perks

Volunteer expenses

Most volunteers do not receive compensation for their work or services, but some volunteer organizations will provide stipends for volunteers who travel to perform volunteer work. For example, if you travel overseas to volunteer in another country, you may receive a stipend to pay for your travel expenses and room and board.

The exact amount a person receives as a stipend will vary greatly depending on what they are receiving the stipend for and expenses incurred related to the duties the person performs. For example, an intern may receive a monthly stipend of $700, while a doctoral student may receive an annual stipend of $25,000.

Companies that provide stipends to offset the costs of health insurance, wellness programs, or other services may pay its employees the total cost of the program or service at the time the program or service is rendered. For example, if a yoga studio membership is $100 a month, the employee would receive a stipend of $100 each month for the membership cost.

The exact amount a company pays for a stipend is up to their discretion and does not have to meet minimum wage requirements or any other wage-related regulations as long as the individual is not considered a regular employee.