Stipend vs. Salary

The terms stipend and salary can be confusing, especially as they are often used interchangeably and improperly. Definitions follow:

STIPEND SALARY
Payment of a living allowance for a training or learning experience from an individual fellowship award or institutional training grant Payment of services rendered and there is an employee/employer relationship
The Center does not control the outcome of the individual's work product The Center has control over the individual's work product
The Center does not deduct Federal taxes (income, FICA, etc.) on behalf of the stipend recipient The Center is responsible for collection of all payroll taxes (income, FICA, etc.)
F&A (indirect costs) is not collected for expenses associated with a stipend award unless allowable by the funding agency's guidelines F&A will be collected to the fullest extent as allowed by funding agency guidelines
Eligible for most benefits offered by the Center Eligible for most benefits offered by the Center

Will I Be Paid a Stipend or a Salary?

If the answer is yes to any of the following questions, chances are a salary, rather than a stipend will be paid to the individual:

  1. Must the individual remain at the Center to receive payment?
  2. Is FICA (Social Security) withheld from the individual’s payment?
  3. Does the Center have the right to control the details and means by which the individual performs the work?
  4. Does the Center have the right to control and direct the activities and outcome of the individual? 
This page was last modified 12.30.08
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