International Wage Earners vs. Stipend Recipients

Foreign national students, scholars and employees receiving a payment from WashU typically fall into two main categories – a wage earner or a stipend recipient. Read below to understand the difference between the two and corresponding tax implications.

Stipend Recipients

Stipends are a form of support paid to an individual, sometimes originating from a “fellowship,” that is intended to help defray living expenses during a research, training or other type of academic experience.

A stipend recipient is someone who receives a stipend. This support is not considered payment for work. It is meant to provide a living allowance that enables the student or scholar to focus on the educational or research experience. Stipend recipients are not considered “employees” of the university. Therefore, stipend recipients do not complete Form I-9, Employment Eligibility Verification.

Wage Earners

Although the terms “wage” and “salary” are often used interchangeably, both refer to compensation for work. A “wage earner” is someone who is paid either hourly or on a salary basis.

Hourly employees are compensated for each hour they work and must track their hours by clocking in and out through Workday. At WashU, an hourly wage is paid on a bi-weekly basis. In contrast, salaried employees receive a fixed annual amount. At WashU, this salary is distributed in regular monthly paychecks.

A wage earner receives payment for the work or services they perform, which is considered employment income. In other words, wage earners are employees of the university.

All wage earners, whether hourly or salaried, are required to complete Form I-9, Employment Eligibility Verification. This process includes completing tasks in the HR platform “Workday” and meeting with a member of the I-9 team to verify work authorization documents.

Pay Rate Type in Workday

To confirm your pay rate type in Workday:

• Navigate to your Workday Profile by clicking on the person icon in the top right-hand corner of the main page
• Click on ‘View Profile’
• Click on ‘Compensation’ in the red menu on the left-hand side
• You should see your ‘Compensation Plan’ under the ‘Plan Assignments’ section
• The plan will say ‘Hourly’ or ‘Salary’ if you are a wage earner. It will say ‘Stipend’ if you are a stipend recipient.

Tax Implications

Because both types of income – stipends and salaries/wages – are taxable income, WashU has implemented a special process to help foreign nationals determine how their WashU payments should be taxed.

This process begins with completion of the Foreign National Information System (FNIS). Review FNIS instructions for more details. 

General tax withholding information can be found in the Tax Withholdings web page.

To learn more about filing taxes in the U.S., please refer to the Filing your U.S. Taxes web page.

Fellowship Stipend Recipients

Fellowship stipend recipients can find additional information about taxability of fellowship stipend payments on the WashU Financial Services website. 

For information about Quarterly Estimated Tax Payments that may be required of foreign national stipend recipients, please refer to the Quarterly Estimated Tax Payments web page from WashU Financial Services.

Tax Forms

Form	Who receives the form	Where to find the form	When available
Form W-2	Wage earners who work a biweekly or monthly paid job that have taxable wages not covered under a tax treaty.	Workday: Benefits and Pay icon, My Tax Documents	By January 31st
Form 1042-S	Nonresident alien stipend recipients and Any tax treaty benefit holders	Uploaded into FNIS or mailed (for terminated employees only)	By March 15th
Stipend Letter	Resident alien stipend recipients (who did not claim a tax treaty)	Workday: Personal Information icon, Worker Documents	By January 31st

Refer to the Tax Documents resource for more information about tax documents.