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, and remunerations. A stipend is typically a fixed sum and is intended to offset a person’s living expenses while they are in training. A stipend may be a one-time payment, or it may be paid in periodic increments. Unlike a salary or wages, a stipend does not usually represent direct payment for work performed; it is intended to support the individual as they use the specific opportunity to learn. 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 their daily cost of living. A stipend may provide enough money, so that the recipient can stay focused on the job that develops their education, skill, and work experience and increases their future earning potential.

To receive a stipend, a person must be working in a position in which the training or education that they receive from the employer is more beneficial than the work they perform 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 their 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. Their position is considered temporary rather than permanent. The payment of the stipend may reduce their need for additional waged or salaried employment during the training or learning period. Withholding requirements for stipends vary depending on how the payment is classified under federal and state tax law. So stipend recipients have the responsibility of reporting their stipends as taxable income and allocating funds to pay any taxes owed.

Stipend arrangements may also include limitations intended to preserve a training focus. The person receiving the stipend may not hold a job or a position that displaces a regular, seasoned, paid employee. Such positions do not automatically confer future employment, although recipients may apply or interview for available roles.

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 many volunteers to nonprofit organizations across the United States. AmeriCorps participants are required to commit to a fixed term of service. In exchange for their service hours, they receive a taxable living allowance and other benefits as determined by the program. The stipend allows them to cover their basic needs while they help their country and learn skills that will prepare them for future employment. Participants who complete their service term may also receive an education award that can be applied toward qualified educational expenses.

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 (however, from 2025, college athletes will be paid a compensation for their participation). Teaching 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 incrementally or, at times, 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 U.S. Department of Labor offers volunteer firefighters a stipend for completion of a volunteer firefighter training course. Some employers also provide stipends for specific purposes such as housing, relocation, professional development, or wellness expenses. These payments are generally fixed amounts intended to offset designated costs rather than to compensate hourly labor.

Bibliography

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