What Is the Difference Between Stipend and Salary?

You are smart to ask what is the difference between stipend and salary, especially if you are in the situation where you are being paid one type, and you are not sure what the difference is from the other.

Salaries and stipends are quite alike, since they are both methods of payment. However, the primary difference is that a salary is an agreed upon sum for an annual period, for which work is received in return, whereas a stipend is an agreed upon sum for a shorter time period where tangible work may not be received in return.

Salary Is a More Familiar Term

People typically tend to be more familiar with the definition of a salary than with the definition of a stipend. That is because many full time jobs pay some sort of salary, which means that you are promised a fixed amount for the year. The payment is divided up amongst the weeks of the year, and you receive your payments on a regular basis of some sort.

Some full time jobs pay based on an hourly rate, and do not pay a salary. If you are an hourly employee, then you are being paid hourly.

In summary, payment can be a salary, an hourly rate or a stipend.

Purpose of a Salary and a Stipend

Depending upon the situation, salaries and stipends can come to take on different meanings. Therefore, in this section and the following ones, we will be uncovering what some of those different means are.

In the most basic of terms, a salary means return for your work. You do your work and you get paid for your work. However, sometimes when stipends are involved, you are not necessarily doing work in correct exchange for the money. Perhaps a student is getting a stipend to do research. It is not the same as in a research laboratory where a researcher is getting paid to do research. In the first situation, the research is not for profit or some other sort of commercial gain. It is to benefit the student.

Another example that you might be familiar with is reality television. On the American version of Big Brother, contestants receive a stipend while they are appearing on the show. They are not doing "work" for that stipend, but they are participating in the program.

Salaries Tend to be More Permanent

As we have at least somewhat illustrated in our aforementioned examples, there is difference in the permanency of a stipend and a salary. A stipend is usually paid for a short amount of time, often agreed upon-or at least known-by all of the parties involved. Big Brother only lasts for a couple of months, so the contestants only receive the stipend while they are actually on the show.

Of course, salaries are not "forever" as people lose their jobs and quit their jobs. However, until that time period comes, or until a raise arises, that amount of salary will continue to be paid.

Stipends Are Often Paid in Training

Sometimes the differences between stipends and salaries come into play when we are talking about an individual who is training for a job. This concept relates back to the one regarding the purposes of salaries and stipends. People who are being trained are learning how to work; they are not necessarily working. They might not be producing a product for the greater good of the company yet. Therefore, during the training period, those individuals will be paid a stipend.

Once they have completed the period of training time, they will move on to work for a salary or to some other form of payment, such as by the hour.