Is a stipend considered a wage or a salary?

No, a stipend is considered neither a wage nor a salary. However, in certain circumstances, it can be considered an addition to a salary if it's part of your benefits package. Stipends are considered separately from wages or salaries, meaning that it's taxed differently.

Are stipends subject to taxes?

Yes, stipends are subject to taxes. However, it's not taxed as income, meaning that the way that it's taxed is different for both the payer and payee. As it's not counted as a wage earned, no taxes are withheld from it, meaning that you will be required to pay that yourself on your taxes.As it isn't considered a wage, you won't have to worry about income tax, especially as stipends also tend to be much lower than either wages or salaries.

Stipend Vs. Salary: What’s The Difference?

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Stipend Vs. Salary: Understanding the Differences in 2026

In today’s diverse labor market, understanding different forms of compensation is crucial. While salaries and hourly wages are well-known, stipends are another important type of payment that has become increasingly relevant, especially in remote and hybrid work environments. Let’s explore the key distinctions between stipends and salaries and their implications for workers in 2026.

To start, it’s essential to recognize that stipends and salaries are not interchangeable. Some professions, like clergy or certain academic positions, may receive stipends rather than salaries, but these payment structures serve different purposes. Moreover, it’s possible to receive both a stipend and a salary simultaneously.

Typically, stipends are provided to cover specific expenses. For instance, a business traveler may receive a stipend for meals while on the road. Generally, stipends are fixed amounts given upfront, whereas salaries are structured as regular payments for services rendered, typically on a set schedule.

Key Takeaways:

Stipend	Salary
A fixed sum paid periodically for services or to cover specific expenses.	A predetermined amount paid for work, usually calculated annually and paid on a regular schedule.
Commonly awarded to those not in traditional employment roles, such as students, interns, clergy, or researchers.	Paid to individuals engaged in structured employment with a defined number of hours; salaries remain constant regardless of hours worked.
Stipends are often modest, helping with expenses but not always covering them fully.	Salaries typically offer higher compensation, with amounts varying based on job type and industry.
Originates from the Latin word stipendium, meaning a “gift” or “to pay,” indicating a sum provided.	Derived from the Latin salārium, historically related to compensation for military service.

What Is a Stipend?

A stipend is defined as “a fixed sum of money paid periodically for services or to defray expenses.” In contemporary usage, stipends are most frequently associated with covering costs, rather than serving as wages.

Stipends are commonly provided to students, interns, clergy, and others in specialized roles. They aim to help alleviate living costs associated with these positions, especially in scenarios where work may not be compensated with a traditional salary, such as internships.

The defining characteristic of a stipend is that it is given in advance and is not considered payment for work performed. While it may offset certain costs related to a job or role, its primary purpose is not to serve as a wage.

In addition to covering living expenses, stipends can also be designated for specific purposes. For example, organizations may offer stipends for business travel expenses, wellness initiatives, or educational pursuits like certifications or training related to one’s field.

The term has been in use since the 15th century, originating from the Latin stipendium, which combines stip- and pendre, where stip refers to a gift, and pendre means to weigh or pay.

What Is a Salary?

A salary is defined as a “fixed compensation paid regularly for services.” Employees on a salary receive a consistent amount for their work, which can be distributed weekly, biweekly, bimonthly, or monthly.

Unlike hourly wages, salaries do not fluctuate based on the number of hours worked, provided that job responsibilities are met. This often means that salaried employees may not receive overtime pay, although they receive consistent income regardless of weekly workload variations.

Salaries reflect a primary income source, distinct from other forms of compensation such as bonuses, health benefits, or other perks. They are subject to income tax and contribute to Social Security and Medicare deductions.

The term salary derives from the Latin word salārium, which means “official pay” for military or civil service roles. The connection to salt, often referred to as “salary” in historical contexts, is less about actual compensation in salt and more about the value associated with essential goods.

Stipend vs. Salary FAQ

Is a stipend considered a wage or a salary?

No, a stipend is neither a wage nor a salary. However, it can be viewed as an addition to a salary if included in your benefits package. Stipends are taxed differently than wages or salaries.
Are stipends subject to taxes?

Yes, stipends are subject to taxes. However, they are not taxed as income in the traditional sense. Taxes on stipends are handled differently, and no taxes are withheld, meaning individuals must report and pay taxes on their own.

While stipends are not considered wages and tend to be lower in amount compared to salaries, it is essential to understand how they fit into your overall financial picture.

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Author

Di Doherty

Di has been a writer for more than half her life. Most of her writing so far has been fiction, and she’s gotten short stories published in online magazines Kzine and Silver Blade, as well as a flash fiction piece in the Bookends review. Di graduated from Mary Baldwin College (now University) with a degree in Psychology and Sociology.

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