How Much Can a Surrogate Mother Make?
Gain a clear understanding of the financial considerations for surrogate mothers, from earnings to covered expenses and payment logistics.
The financial aspects of a surrogacy journey involve more than a single fee for the surrogate mother. Compensation structures vary, reflecting the significant commitment involved in carrying a pregnancy for intended parents. Understanding these arrangements is important for anyone considering surrogacy.
Base Compensation for Surrogacy
Base compensation is the primary payment a gestational surrogate receives for carrying a pregnancy. This amount typically ranges from $35,000 to $75,000 for a first-time surrogate in the United States. Some agencies report total compensation packages, including base and other allowances, can reach $90,000 or more. Several factors influence the specific figure a surrogate may receive.
Geographic location is a determinant, with rates differing across states. Areas with a higher cost of living or strong demand for surrogates, such as California or New York, often offer higher base compensation, sometimes reaching $45,000 to $85,000 for a first-time surrogate. This regional variation reflects market dynamics and differing legal frameworks.
A surrogate’s experience level also plays a role. Experienced surrogates, who have successfully completed previous journeys, receive higher base compensation due to their proven track record. An experienced surrogate might earn an additional $5,000 to $10,000, with total compensation packages potentially reaching $97,000 to $110,000 or more.
While gestational surrogacy, where the surrogate has no genetic link to the child, is overwhelmingly more common, traditional surrogacy (where the surrogate is also the biological mother) occurs less frequently and may have different compensation considerations. Carrying multiple fetuses, such as twins or triplets, typically increases base compensation, often by an additional $5,000 to $10,000 for twins. The choice between working with a surrogacy agency or pursuing an independent arrangement can also affect the overall compensation structure, as agencies often provide a structured package including various support services.
Additional Expenses and Reimbursements
Surrogate mothers receive reimbursements and allowances to cover various expenses and inconveniences throughout their journey. These payments ensure the surrogate incurs no out-of-pocket costs related to the surrogacy.
Reimbursed expenses include:
Medical costs: All pregnancy-related costs not covered by the surrogate’s existing health insurance, including co-pays, deductibles, and specialized care.
Travel expenses: Costs associated with clinic visits for medical appointments, screenings, and embryo transfers, including flights, accommodation, meals, and local ground transportation.
Legal fees: For the surrogate’s independent counsel to review and negotiate the surrogacy agreement. This ensures the surrogate has separate legal representation to protect her interests.
Lost wages: Compensation for time off work due to appointments, medical procedures, or physician-ordered bed rest. This includes lost wages for a spouse or partner if they need time off.
Maternity clothing allowance: Typically ranging from $500 to $1,000.
Childcare expenses: Incurred during appointments or travel.
Stipends for incidentals or discomforts throughout the pregnancy.
Life insurance policy: Typically valued at $500,000, often purchased by the intended parents for the surrogate, providing financial protection for her beneficiaries.
Payment Structure
Compensation and reimbursements are typically managed through an escrow account or a third-party fund manager. This arrangement ensures that all funds are held securely and released according to the terms outlined in the surrogacy agreement. An independent escrow agent or specialized financial service acts as a neutral party, overseeing transactions between intended parents and the surrogate.
Base compensation is usually paid in installments over the course of the surrogacy journey. An initial payment may be made after the legal contract is signed or following embryo transfer. The majority of base compensation is often distributed through equal monthly installments once pregnancy is confirmed, typically after the confirmation of a fetal heartbeat around six weeks gestation. This monthly schedule continues throughout pregnancy, with a final payment released shortly after delivery, usually within a few weeks.
Reimbursements for additional expenses are handled as specified in the surrogacy contract. Some allowances, like maternity clothing, may be pre-paid or disbursed at specific milestones. Other expenses, such as medical co-pays or travel costs, are typically reimbursed upon submission of receipts or paid directly by the intended parents or their agency. The clear and detailed surrogacy agreement serves as the governing document, specifying all payment terms, milestones, and methods of disbursement to ensure transparency and accountability.
Tax Considerations
Compensation received by a surrogate mother is generally considered taxable income by the Internal Revenue Service (IRS). This is because the payment is viewed as compensation for services rendered, rather than a gift or other non-taxable receipt. Surrogates should report this income on their annual tax return.
While arguments have been made to classify surrogacy compensation as a gift or payment for pain and suffering, the IRS has not formally recognized these interpretations. The annual gift tax exclusion is often significantly lower than typical surrogacy compensation, meaning most payments would exceed this exclusion even if classified as a gift. If a surrogate receives a Form 1099-MISC from the intended parents or the escrow service, it indicates the income is being reported to the IRS and must be claimed.
Surrogates should maintain meticulous records of all income received and any related expenses. While direct compensation is taxable, certain unreimbursed medical expenses related to the surrogacy might be deductible if they meet specific criteria and exceed 7.5% of adjusted gross income. However, surrogate compensation, medical bills, and health insurance premiums are typically not deductible for the intended parents. Consulting with a qualified tax professional, such as a Certified Public Accountant (CPA) or a tax attorney, is recommended for personalized advice on specific tax obligations and potential deductions.