Bonus vs. Stipend: Know the Difference
By Shumaila Saeed || Updated on December 25, 2023
A bonus is a one-time extra payment given for exceptional work, while a stipend is a regular, fixed payment, often for internships or training.
Key Differences
A bonus is typically a financial reward given in addition to one's usual salary, often for exceptional performance or as part of a company's profit-sharing plan. A stipend, in contrast, is a fixed regular payment, usually provided to interns or trainees, not necessarily related to performance but rather to support them during their training period.
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Dec 07, 2023
Bonuses are generally discretionary and can vary in amount, reflecting an employee's or the company's performance. Stipends, however, are usually predetermined and consistent, aimed at covering basic living expenses during a period of learning or internship.
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Dec 07, 2023
The purpose of a bonus is to incentivize and reward employees, often tied to achievements or company success. Stipends serve as a support mechanism, ensuring those in training or lower-income positions can sustain themselves financially.
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Dec 07, 2023
In terms of tax implications, bonuses are typically treated as income and are taxable. Stipends can also be taxable, but they often come with different tax considerations, as they are not considered wages for services rendered.
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Dec 07, 2023
Bonuses are common in various industries, especially in corporate sectors, as a part of employee compensation packages. Stipends are frequently associated with academic, research, internships, and fellowship programs, providing financial support rather than a salary.
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Dec 07, 2023
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Comparison Chart
Definition
An extra payment given for exceptional work.
A regular, fixed payment for support during training or internship.
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Frequency
Usually a one-time payment.
Paid on a regular, often monthly, basis.
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Dec 07, 2023
Purpose
To reward and incentivize performance.
To provide financial support during learning or training.
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Dec 07, 2023
Variability
Can vary based on performance or company profits.
Generally fixed and predetermined.
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Common Contexts
Corporate sectors and employee compensation.
Academic, research, and training programs.
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Dec 07, 2023
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Bonus and Stipend Definitions
Bonus
An extra payment given to employees as a reward.
She received a bonus for her outstanding sales performance.
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Stipend
A fixed regular payment given to interns or trainees.
He received a monthly stipend during his internship at the law firm.
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Dec 07, 2023
Bonus
Often part of a profit-sharing scheme in companies.
As part of our profit-sharing scheme, employees were given a generous bonus.
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Dec 07, 2023
Stipend
Financial support for those in training or academic programs.
The university offered her a stipend to cover her expenses during her research project.
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Bonus
A discretionary reward above regular pay.
The manager decided to give a bonus to the most productive team.
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Stipend
A form of payment to sustain individuals during unpaid or low-paying roles.
The stipend for the teaching assistants was designed to support their academic pursuits.
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Bonus
A financial incentive for exceptional work.
The year-end bonus reflected the company's excellent profits.
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Dec 07, 2023
Stipend
Common in educational, research, and fellowship contexts.
As a research fellow, she was provided a stipend to support her studies.
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Dec 07, 2023
Stipend
A fixed and regular payment, such as a salary for services rendered or an allowance.
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Oct 19, 2023
Bonus
A sum of money or an equivalent given to an employee in addition to the employee's usual compensation.
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Oct 19, 2023
Stipend
(archaic) A regular fixed payment made to someone (especially a clergyman, judge, soldier, or teacher) for services provided by them; a salary. 15
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Oct 19, 2023
Bonus
A sum of money in addition to salary that is given to a professional athlete for signing up with a team.
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Oct 19, 2023
Stipend
Some other form of fixed (and generally small) payment occurring at regular intervals, such as an allowance, a pension, or (obsolete) a tax. 16
Pocket money
My stipend for doing public service is barely enough to cover living expenses.
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Oct 19, 2023
Bonus
A premium, as of stock, that is given by a corporation to another party, such as a purchaser of its securities.
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Oct 19, 2023
Bonus
A sum of money that is paid by a corporation in excess of interest or royalties charged for the granting of a privilege or a loan to that corporation.
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Oct 19, 2023
Bonus
(Basketball) An additional free throw awarded to a player who has been fouled when the opposing team has committed more than a specified number of fouls during a period of play.
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Stipend
To provide (someone) with a stipend (an allowance, a pension, a salary, etc.). 16
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Bonus
An extra sum given as a premium, e.g. to an employee or to a shareholder.
The employee of the week receives a bonus for his excellent work.
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Oct 19, 2023
Stipend
Settled pay or compensation for services, whether paid daily, monthly, or annually.
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Oct 19, 2023
Bonus
(video games) An addition to the player's score based on performance, e.g. for time remaining.
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Oct 19, 2023
Bonus
(basketball) One or more free throws awarded to a team when the opposing team has accumulated enough fouls.
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Oct 19, 2023
Stipend
A sum of money allotted on a regular basis; usually for some specific purpose
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Oct 19, 2023
Stipend
Not typically based on performance but to aid living expenses.
The stipend helped her manage her living costs while volunteering.
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Dec 07, 2023
Bonus
A premium given for a loan, or for a charter or other privilege granted to a company; as the bank paid a bonus for its charter.
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Oct 19, 2023
Bonus
An extra dividend to the shareholders of a joint stock company, out of accumulated profits.
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Oct 19, 2023
Bonus
An additional payment (or other remuneration) to employees as a means of increasing output
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Oct 19, 2023
Bonus
Used to motivate and retain employees.
The annual bonus served as a motivation for employees to exceed their targets.
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Dec 07, 2023
Repeatedly Asked Queries
What does a stipend mean?
A stipend is a fixed regular payment, often given to interns or trainees for their support.
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Dec 07, 2023
Why do companies offer bonuses?
Companies offer bonuses to motivate employees, recognize achievements, and encourage specific behaviors or outcomes.
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Are bonuses guaranteed?
No, bonuses are typically discretionary and not guaranteed.
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Dec 07, 2023
What is a bonus?
A bonus is an extra payment given to employees, often as a reward for good performance.
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Dec 07, 2023
Is a bonus considered part of your base salary?
No, a bonus is not considered part of your base salary, as it is usually a separate, variable payment.
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Dec 07, 2023
When are bonuses usually paid out?
Bonuses are often paid out annually, quarterly, or as a one-time reward for achieving specific goals or milestones.
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Dec 07, 2023
Can bonuses be negotiated during a job offer?
Yes, in some cases, bonuses can be negotiated as part of a job offer, especially for executive positions or specialized roles.
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Dec 07, 2023
Is a stipend the same as a salary?
No, a stipend is usually a smaller, fixed amount to cover basic expenses, not a full salary.
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Dec 07, 2023
Can you negotiate a stipend amount?
In some cases, you may be able to negotiate the amount of a stipend, especially if it is associated with a competitive program or position.
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Dec 07, 2023
Is a stipend paid on a regular schedule?
Stipends are usually paid on a regular schedule, such as monthly or quarterly, but the frequency may vary depending on the program or organization providing it.
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Dec 07, 2023
Can bonuses be in forms other than money?
Yes, bonuses can also be non-monetary, such as gift cards, stock options, or additional vacation days.
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Who typically receives stipends?
Students, researchers, interns, and individuals participating in specialized programs or projects are common recipients of stipends.
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Dec 07, 2023
What is a performance bonus?
A performance bonus is a reward given to employees based on their individual or team performance, often tied to specific targets or metrics.
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Dec 07, 2023
Is a stipend the same as a scholarship or grant?
No, stipends are typically payments for living expenses, while scholarships and grants are often awarded for tuition, research, or academic achievement.
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Dec 07, 2023
Can you work while receiving a stipend?
In many cases, individuals receiving stipends are allowed to work or have part-time jobs, but it may depend on the terms and conditions of the stipend.
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Dec 07, 2023
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About Author
Written by
Shumaila SaeedShumaila Saeed, an expert content creator with 6 years of experience, specializes in distilling complex topics into easily digestible comparisons, shining a light on the nuances that both inform and educate readers with clarity and accuracy.
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