Understanding Stipend vs. Salary: Can You Explain the Key Differences?

Hi, I would like to know, what is the difference between a stipend and a salary? I understand that a stipend is given to trainees; however, I would like to know more about the same. Request to limit your answers to the specified question.

Regards,
Mahesh

Difference Between Salary and Stipend

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.

Regards,
Harish Nayak

Difference Between Stipend and Salary

Harish has not written the basic difference.

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

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

Some companies use the word "stipend" loosely without understanding its proper meaning. You may employ someone and designate him/her as a "trainee"; however, the remuneration he/she receives is not a "stipend" but a monthly salary, and PF and ESI regulations are applicable.

I hope this satisfies your query now.

Regards,
Dinesh V Divekar

Understanding Stipend, Salary, and Wages

Stipend, salary, and wages are statutory terms used in various Acts.

Stipend

A stipend is an amount paid to an apprentice under the Apprenticeship Act of 1961. It is also an amount paid to an apprentice (trainee) under the Standard Standing Order Act.

Regards

Difference Between Stipend and Salary

A stipend is paid to cover one's expenses during training or apprenticeship, and it is not taxable. Salary is remuneration for the work done.

Thank you!