Raises, bonuses, stipends, and the difference
A $1,000 stipend, reimbursement, or raise aren't the same for you bottom line.
When negotiating pay as an SLP, it’s not all about raises. Sometimes you may ask for (or be offered) any of the following:
- Raise
- Stipend
- Bonus
- Honorarium
- Reimbursement
Or you may less-commonly be offered things like: Allowance, Commission, Profit sharing, Equity, Fringe benefits… The list goes on and on. The thing to know is that a $1000 raise is not $1000 bonus is not a $1000 reimbursement. We’ll describe each of the most common payments types in SLP jobs, below, so you can weigh your options and strategize your next negotiation.
| Category | Timing | Compensation or cost recovery? | Taxable? | Payroll tax | Typically reported on | Number on paper | Money in your pocket | Wage equivalent |
| Raise | Recurring, permanent | Compensation | Yes | Yes | W2 | 1000 | 654 | 1000 |
| Dollar for dollar, a raise beats a bonus, because a raise is permanent and it compounds. It lifts the 401(k) match, overtime rate, and severance base. Realistically though, raises are harder to get than bonuses, so you'll want to negotiate for what will go through. | ||||||||
| Stipend | Recurring | Compensation | Yes | Yes | W2 | 1000 | 654 | 1000 |
| A stipend is when you're given a flat sum with an earmarked purpose. And any time this happens, it's taxable wages. Allowances are very similar to stipends. | ||||||||
| Bonus | One-time | Compensation | Yes | Yes | W2 | 1000 | 654 | 1000 |
| SLPs typically see these tied to performance. But getting it once doesn't mean you'll get it again if "discretionary" (which it most-often is). Bonuses are taxed just like wages, so no difference there, though tax timing may vary. | ||||||||
| Honorarium | One-time | Compensation | Yes | Yes — both halves | 1099 | 1000 | 608 | 930 |
| You're taxed for honorariums as though you're self-employed. Meaning extra taxes, but expenses (if you tracked them!) reduce the hit. | ||||||||
| Reimbursement | Per expense | Cost recovery | No | No | Not reported | 1000 | 0 | 1530 |
| Restores you to where you were; it does not make you richer. It's just something your employer pays for instead of you, so you can also think of it as exact dollars back in your pocket, if that's applicable and true for you. | ||||||||
***Super-important caveat of this graph! The numbers here are generalized, so that we don’t have to ask you for your tax bracket, state, and other details in order to get the numbers precise. Instead, the dollar amounts here are based on a typical middle-income taxpayer. Your own numbers will vary by the state you live in, your household income, etc.
Now let's look at each category a little more:
Raise
As you probably know, a raise is an increase to your contracted hourly rate or salary. It’s what most people think of when they think of “more pay”. While it's typically the best to get, but often the hardest to get. That's because, compared to all the other payment types, it’s the only one that is permanent, on every paycheck, and most valuable over time because a raise compounds: it becomes the base for future percentage raises, it lifts your 401(k) contribution and any employer match, it raises your overtime rate if you're hourly, and it typically anchors severance, pension, and disability calculations. Therefore, a $3,000 raise beats e.g. $3,000 bonus.
Stipend
Stipends will have other words attached—e.g. training stipend, health stipend, bilingual stipend, remote work or tech stipend. It’s a fixed, recurring payment intended to support someone with something they need. The exact dollar amount and payment schedule are set in advance, and don’t vary. Also, W2 stipends are withheld on your paycheck like salary.
IMPORTANT NOTE FOR SLPs: While stipends are taxed like wages, they’re not always treated as wages by the state laws that govern pay cuts. Then means, stipends can be less “permanent” than actual wages. This is because stipends are typically classified as perks or policies, not wages; so state and federal laws around wages can ignore stipends. A company can *poof* vanish a stipend pretty easily, whereas it’s harder to legally reduce your wages, especially without advance notice and a paper trail. Ultimately, how “permanent” a stipend is for you will come down to where it’s written—e.g. in your offer letter, a grant award, or a policy page.
Bonus
SLPs are most likely to see bonuses as either performance bonuses, or sign-on bonuses. Things to know about each:
- Performance-based bonuses are tied to metric that can vary from year to year. And sometimes, that's not fully in your control. Also, when "discretionary" a bonus can also come as go whenever the employer sees fit. So they're less permanent than either stipends or raises.
- Sign-on bonuses usually have a repayment clawback if you leave within 1–2 years. We find that these are often a bit of a red flag and carry the perception of such, even when it's not.
Bonuses are taxed the exact same as a raise or stipend. Sometimes people think they're taxed differently because when the taxes are taken out can vary. Regardless, it all shakes out the same at year-end.
Honorarium
An honorarium is a payment offered for a service. This can be a guest lecture, a keynote speaking event, a panel appearance, or expert review of documentation. Tax-wise it's usually the worst deal in the set, because it’s taxed as though you’re self-employed, which means self-employment tax at 15.3% on top of income tax — you pay both halves of the payroll tax that an employer would otherwise split with you (once net self-employment earnings reach $400 for the year). You can deduct genuine related expenses to reduce the tax burden, but a $1,000 honorarium nets meaningfully less than a $1,000 bonus.
Reimbursement
This is payment back for a thing you’d otherwise pay for. It’s different from a stipend in that it’s not taxable (note: tax-free status requires documentation under an accountable plan; undocumented payments are taxable). The most common reimbursements for SLPs are things like: your state license, CCCs, or CEUs. Keep in mind that reimbursement is cost recovery not compensation. So a $500 reimbursement doesn't make you $500 richer; it restores you to where you were before you spent $500 (e.g on a course). So the way you’d think about it from a financial standpoint is: Would I be buying this no matter what, even if I didn’t have this job? If yes, it’s more like money in your pocket. If not, it’s not.
How do I know if my next job has any of these?
At Informed Jobs, we ask for you! We have a standard section in our job posts for reimbursements, stipends, and any other payments or perks you'd need to know about to understand the full compensation package. We also have employers check a box for if they pay a bilingual differential, which could come in the form of wages or a stipend. Or for jobs not in our database, ask those employers!
