Difference between Stipend and Salary?? - apprentice act.. CiteHR

maheshcool Started The Discussion:


Would like to know, what is the difference between Stipend and Salary?

Understand the Stipend is given to Trainees. however, would like know more about the same.

Request to limit yoor answers to the specified question.


nayakharish1983@gmail.com -  Member Since: Jan 2011

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.


Harish Nayak

Dinesh Divekar -  Member Since: Nov 2006
Dear Mahesh,

Harish has not written the basic difference.

Stipend is paid under the provisions of Apprentice Act 1961. The minimum amount is decided and revised every year by the Govt. However, employers have liberty to pay more than what is stipulated. Stipend is paid to the apprentices. They are not employees, either regular or contractual. Provisions of PF and ESI are not applicable for apprentices when they receive stipend.

On the other hand, salary is paid to the employees. Employee could be regular, temporary or contractual. Rules of payment of monthly salary are governed by Payment of Wages Act, 1936, Shops or Establishment Act or Factories Act etc.

Few companies use the word "stipend" loosely without understanding their proper meaning. You may employ some person and designate him/her as "trainee", however, remuneration that he/she receives is not "stipend" but monthly salary and PF and ESI regulations are applicable.

Hope this satisfies your query now.

Dinesh V Divekar

jayantabasak -  Member Since: Mar 2009
Dear Dinesh, One correction, now ESI is applicable to the Apprentices as per Employees' State Insurance (Amendment) Act, 2010. Regards, Jayanta Basak

Kiran Kumar Choudhary -  Member Since: Nov 2007
Dear Mr. Mahesh,

Stipend , Salary & wages are statutory terms used in various Act.

Stipend- An amount paid to Apprentice under Apprentiship Act-1961.
An amount paid to Apprentice (Trainee) under Statndard Standing order Act

pon1965 -  Member Since: May 2009
Stipend is paid to one to his/her expenses during training or apprenticeship which is not taxable. Salary is remuneration for the work done. Pon

Dinesh Divekar -  Member Since: Nov 2006
Dear Jayanta,

Thanks for the update. During my HR days, ESI was not applicable on stipend.

Dinesh V Divekar

Dear Dinesh,

One correction, now ESI is applicable to the Apprentices as per Employees' State Insurance (Amendment) Act, 2010.

Jayanta Basak


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