This article is about Justworks Payroll. What product am I using?
This page covers how Justworks Payroll admins can issue stipend payments to W-2 employees, as well as how to edit or cancel a scheduled stipend.
What Is a Stipend?
A stipend is a flat-dollar, taxable payment issued to W-2 employees outside of their regular salary or wages. Stipends are specifically designed for recurring benefit allowances such as cell phone stipends, wellness allowances, internet reimbursements, or professional development funds.
Stipends are subject to standard tax withholding. The earning type and tax treatment are automatically configured — no additional setup is required from the admin.
Important: Stipends are available for W-2 employees only. 1099 contractors are not eligible for this payment type.
How Can Admins Issue a Stipend?
Admins can schedule a stipend by navigating to **Pay** on the left-hand side menu and clicking the **Add payment** button in the upper right-hand corner. From there, select the **Stipend** card in the Payments Center.
Admins can also initiate a stipend directly from an employee's profile page, which will pre-select that employee in the creation flow.
From there, choose your payment method:
-
Direct deposit: Justworks processes the payment
or - External payment: You pay the employee directly and Justworks records it for tax and pay stub purposes.
Then enter the payment details, including pay date, pay period, and a note describing the stipend's purpose (e.g., "August cell phone allowance"). Select one or more employees and enter individual amounts for each payee.
Once you've filled in the required details, click Continue to review, then Submit to confirm. The note you enter will appear on both the company's payroll records and the employee's pay stub, where the stipend shows as its own line item.
After the payment has been saved, it will show up under the Upcoming Payments section of your Home workspace until it has been processed. Once processed, you can find the payment details in the Payrolls tab under Payments in the left side menu.
How Do I Edit or Cancel a Stipend?
If you need to edit or cancel a stipend, you can do so by navigating to the employee's profile page and clicking the **View Payments** button at the top of the page.
From there, click One-time payments, which will bring you to a screen showing any scheduled payments with the option to edit or delete them.
When editing, you can change the amount, payment date, pay period, or notes.
Please note, any changes to a stipend must be submitted before 2pm Eastern on the payment's processing date.
Disclaimer
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for accounting, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.