Trainees are paid either a “stipend" or a “salary" or a mix of both. While the amount paid is the same regardless of this distinction, things like pay schedule, tax withholdings, and visa eligibility can vary between the two.

Why 2 types of funding?

Fellowships pay stipends while grants pay salary. Why the difference? Fellowships are designed to support training and education of a specific individual while grants support a research project and salary for needed personnel. If a trainee switches research groups or universities, some fellowships can be moved with the trainee. However grant funding is linked to work on a project, so it is unlikely to follow a specific trainee, as it is very likely that another trainee within the PI’s group can complete the necessary work. Check your notice of award if you are unsure if a given award is a fellowship or a grant, as the term fellowship is often used colloquially to describe a grant given to a trainee.

A second point of distinction is that a stipend is thought of as a way to cover living expenses while studying or participating in research, while a salary is a fixed payment to an employee performing a specific job.

H1B Visas

In many cases, individuals on H1B visas cannot be paid stipends, and are thus ineligible for some fellowships. If this affects you, you should reach out to a potential fellowship funder, as there are some exceptions.

Taxes

If a trainee is paid a stipend the University does not automatically withhold for taxes; if they are paid a salary they do. Therefore, trainees receiving a stipend need to pay quarterly estimated taxes. The net tax paid by an individual trainee paid by either mechanism is the same, the difference is in the trainee’s level of involvement.

Pay Schedule

In addition to differences in tax withholdings, there can also be differences in the frequency and schedule of payments to stipend and salary recipients. Stipends are often paid monthly or quarterly, while salaries are paid twice monthly, on the standard university payroll schedule.

Mixed Salary and Stipend

If a trainee is paid by both salary and stipend, they will see multiple deposits into their bank account each month. The salary payments will arrive with taxes already withheld according to the university’s payroll calendar. The stipend payments will arrive independently on a schedule determined either by the stipend funder or by university policy. As the stipend portion of a trainees pay does not have taxes withheld automatically, a trainee will have to calculate and pay quarterly estimated taxes for the portion of their pay received as a stipend.