What does monthly stipend mean

Apprentices receive stipends to cover their living expenses while they complete their apprenticeship. Related: What Is an Apprenticeship? Some internships provide stipends to cover the cost of housing and food.

Most companies have a set stipend based on the average cost of living in the area the intern works. Internships often lead to full-time positions, so employers want to ensure interns can focus and perform well on the job without financial stress. Related How to Create a Resume for an Internship.

Fellowships provide financial aid to students and may offer tuition support in the form of a stipend. The student does not need to perform any services to receive the stipend other than continue to pursue their education. Clergy members may receive a stipend paid for by congregation donations. This stipend allows the clergy to practice their ministries without needing another job to cover their living expenses.

Find jobs. Company reviews. Find salaries. Upload your resume. Sign in. What is a stipend? Who receives a stipend?

How do stipends work? Stipend uses. Stipends are usually predetermined, fixed amounts, and listed in policies put in place by schools, training programs, or companies providing training to employees. They may be paid periodically, such as weekly or monthly, or in a lump sum.

Generally, stipends are paid for the following:. Therefore, you'll often see interns, apprentices, and trainees receive a stipend to cover living expenses while they are in training.

Clergy may receive a stipend so that they don't have to take on an additional job to cover their costs. Sometimes, stipends also may be offered to encourage certain activities. For instance, academic institutions may offer stipends that work like grants, to create incentives for researchers to further their work on certain projects, such as writing books and scholarly articles, translating works, or interpreting and analyzing collected data.

Some schools offer stipends to help with specific added expenses, such as a computer or other necessary equipment. Similarly, some employers offer employees a stipend in addition to their regular pay, to cover some or all of the costs of specific things such as health insurance , a gym membership, or continuing education for career development. Sometimes companies offer stipends to help an employee cover business expenses such as meals for clients.

If employers plan to offer interns a stipend instead of an hourly wage, they should include that information on the advertisement for the internship and reiterate it during the interview. If you believe you might be eligible for a stipend, ask your organization if you are able to receive one, and ensure you are given a written agreement acknowledging the stipend and when it will be paid.

You should inquire how a company's stipend pay process will work so that you can plan around the payments if you need to. Stipends cannot be used to hire students to replace existing staff, and the students must be the primary beneficiary of the employment or training—not the company.

Also, a stipend may be lower than the minimum wage as long as it's used to pay trainees. Because they're often used to cover expenses, the amounts paid as stipends are relatively low. Of course, this isn't a hard-and-fast rule, as the pay tends to vary by employer. Stipends are considered taxable income so you'll have to pay the entire This includes both your portion and the employer's portion. If you receive a stipend, there are certain things you must consider.

One of the main advantages of this type of compensation is that you get to keep what you earn. That's because people who receive stipends don't have taxes withdrawn to pay for Medicare and Social Security.

But remember, stipends are considered a form of taxable income. This means recipients need to set aside a portion of their earnings. For the tax year, the withholding rate for both programs is Recipients should be careful about how their payments are classified. Students and interns should be classified as such. If the company identifies you as an employee, your stipend may be taxed and you won't receive the full amount. And in this case, you're entitled to receive the minimum wage and any overtime pay, if it applies.

On the other hand, employees should ensure they aren't considered trainees. This could lead to complications with their pay. As mentioned above, stipends are not hourly-based pay and are often used by employers as a lower-cost option to pay interns.

In fact, stipends can vary depending on the company or organization that pays them. Some companies pay stipends to help cover housing, food, or travel expenses. Here are just a few of the types of stipends that are offered. Stipends are commonly offered to researchers at academic institutions or other related organizations to help them focus on their projects. Much like grants , these stipends may be furnished by third parties who wish to see a particular study or form of research advance further without fiscal distractions that may otherwise hamper the researcher.

Foundations and comparable entities might also offer stipends on similar terms to support the work of researchers and the projects they are developing.

Stipends might also be offered to cover very specific costs and expenses. For instance, students could receive a stipend that must be used toward the purchase or lease of computers during academic semesters.

Alternatively, stipends may be issued to help defer the cost of transportation incurred by the recipient to and from the company for training purposes. Since employers don't have to offer health benefits to interns, some of them may offer their workers extra money by adding it to their paycheck to help them with health insurance costs. Individuals can then use this extra cash to put toward paying for their insurance premiums for coverage that can be purchased either through the health care exchange or directly from private insurers.

Health and wellness are now an important part of the work-life balance that many employers promote. A stipend is a fixed sum of money you give someone as a fringe benefit or to offset expenses. Usually, companies give stipends to team members, but they can also offer them to volunteers, trainees, students, and other people who support the organization.

Think of a stipend as an allowance for a fixed amount. You could also have a weekly travel stipend to help employees get around the city using public transport or a service like Uber. Or, you could offer a health care stipend to cover the cost of employees' gym membership.

The word stipend comes from the Latin stipendium. It depends. There are some grey areas in the Internal Revenue Service IRS definitions, so it's up to employers to define what they consider a taxable benefit vs.

We always suggest consulting with your accounting team or tax experts for formal guidance. Some stipends can count as taxable income, so federal taxes may need to be paid at the end of the year.

This depends on fringe benefits state taxes and what the stipends are being used for. As such, Social Security and Medicare taxes aren't withheld.

Otherwise, be sure to learn about IRS Publication B to understand how income tax and other tax implications might apply. Stipends are legal when you follow the tax laws in your jurisdiction. Stipends should never be used as a way to exempt someone, either partially or fully, from a salaried position. You can create a stipend for almost anything. Stipends typically exist to fund work-related benefits and perks for employees.

The beauty of stipends is that you can tailor them to fit your company and your employees. Take dating app Hinge, for example. While a dating allowance might not be a typical company perk, here are some more common reasons to offer stipends :. Stipends give you an effortless and effective way to invest in your employees.

These readily available funds are easy to personalize and can significantly boost employee engagement and satisfaction. If your team is mostly remote, stipends offer a great way to keep your team happy. Team members can use their stipend to sign up for a dance class, set up fresh fruit delivery at home, or travel for a quarterly meeting — you set the rules. There are also practical benefits to using stipends.