How Much Do Surrogates Get Paid Monthly?
Learn about the full financial picture for surrogates, including compensation, payment structures, and tax insights.
The decision to become a gestational surrogate involves a significant commitment. Understanding the financial aspects is practical for both potential surrogates and intended parents, as compensation reflects the time, effort, and physical demands of carrying a pregnancy from initial medical screenings to post-delivery recovery.
Understanding Base Surrogate Compensation
Base compensation is the primary payment a surrogate receives for carrying a pregnancy. This amount typically ranges from $35,000 to $90,000 for a first-time surrogate. Several elements influence this figure, including prior experience. Experienced surrogates often receive higher compensation, potentially adding $5,000 to $20,000 more than first-time surrogates.
Geographical location also plays a role in determining base compensation. Surrogates in areas with a higher cost of living or increased demand, such as California, often command higher fees. The policies of the surrogacy agency or the terms negotiated in the agreement also directly impact the base compensation.
Additional Compensation and Reimbursements
Beyond base compensation, surrogates receive additional payments and reimbursements to cover expenses and inconveniences. These are distinct from the base fee and ensure surrogates do not incur out-of-pocket costs. Monthly allowances, typically $200 to $400, cover incidental expenses throughout the pregnancy.
Reimbursements for specific costs are also standard. This includes a maternity clothing allowance, generally ranging from $1,000 to $1,500, disbursed as the pregnancy progresses. Travel expenses for medical appointments, screenings, and the embryo transfer procedure are fully covered, including transportation, accommodation, and a per diem for meals for both the surrogate and a companion. Lost wages, incurred when a surrogate or her companion misses work for appointments, medical procedures, or doctor-ordered bed rest, are also reimbursed.
Further compensation may include childcare costs for appointments, psychological support services, and life insurance premiums. Additional stipends can be provided for specific events, such as carrying multiples (often adding $8,000 to $10,000 or more), or for medically necessary procedures like a C-section (potentially $3,000 to $5,000). Post-delivery, compensation may continue for recovery, and some agreements include payment for breast milk pumping and shipping.
How Payments Are Structured
Surrogate compensation is typically disbursed through a structured payment schedule, often managed by a third-party escrow account or the surrogacy agency. This ensures funds are securely held and released according to the surrogacy agreement. Payments are not a single lump sum but are spread across various milestones.
An initial payment or signing bonus may be provided upon the finalization and signing of the legal contract. Milestone payments are common for significant events such as successful medical screening, initiation of medication, and the embryo transfer. Once a pregnancy is confirmed, the base compensation typically begins to be paid in equal monthly installments over the course of the pregnancy, usually for nine or ten months.
The final portion of base compensation, along with any delivery-related bonuses, is generally paid shortly after the baby’s birth. This structured approach provides consistent financial support throughout the pregnancy. Monthly allowances and expense reimbursements are usually paid on an ongoing basis as incurred or specified in the contract, distinct from base compensation installments.
Tax Considerations for Surrogate Income
The financial compensation received by a surrogate has tax implications. Generally, base compensation for her services is considered taxable income by the Internal Revenue Service (IRS). Surrogates are typically required to report this income on their federal tax returns. While certain payments may be classified as expense reimbursements, the primary compensation for the surrogacy service itself is taxable income.
The classification of surrogacy income can be complex. While arguments have been made to categorize it as a gift or compensation for pain and suffering to avoid taxation, the IRS has not formally recognized these interpretations. Claims of “pain and suffering” compensation are generally not applicable because the surrogate voluntarily enters into the agreement.
Surrogates may be subject to self-employment taxes (Social Security and Medicare) on their compensation if the activity is deemed a trade or business. This determination depends on specific facts, such as prior surrogacy arrangements. Given the complexities of tax laws, surrogates should consult a qualified tax professional to understand their obligations and ensure compliance.