How Much Does a Gestational Surrogate Get Paid?

Gestational surrogacy involves an arrangement where a woman carries a pregnancy for another individual or couple. This process, which facilitates the creation of families, often includes financial compensation for the gestational surrogate. The compensation acknowledges the significant commitment of time, effort, and physical demands involved in carrying a pregnancy for others. Understanding the financial aspects of gestational surrogacy is important for those considering this path. This article will explore the various components of a gestational surrogate’s financial package, from base fees to additional reimbursements and tax implications.

Base Compensation

The primary financial component a gestational surrogate receives is the base compensation, which is a set fee for carrying the pregnancy. This base fee recognizes the surrogate’s dedication and time commitment, often spanning a year or more. The amount of this base compensation can vary across the United States. First-time gestational surrogates typically receive $35,000 to $55,000. Experienced surrogates, having successfully completed prior journeys, often receive higher compensation, potentially $60,000 to $70,000 or more.

The base compensation is generally determined and outlined in the legal contract between the intended parents and the gestational carrier. This fee is intended to cover the surrogate’s personal time and effort, but it does not typically cover specific out-of-pocket expenses directly related to the pregnancy. The base compensation is a flat rate negotiated before the embryo transfer.

Additional Compensation and Expenses

Beyond the base compensation, gestational surrogates receive various additional payments and reimbursements for expenses incurred throughout the surrogacy journey. These payments cover specific costs and additional circumstances. Medical expenses not covered by the surrogate’s insurance, including fertility treatments, prenatal care, and insurance co-pays and deductibles, are typically reimbursed by the intended parents. If a surrogate’s existing health insurance does not cover maternity care for a surrogacy arrangement, the intended parents will often purchase a suitable plan.

Surrogates receive allowances for maternity clothing, often ranging from $750 to $1,250, paid at specific points during the pregnancy. Lost wages for the surrogate due to appointments, medical procedures, or physician-ordered bed rest are also compensated, including up to six weeks postpartum, or eight weeks for a C-section, calculated based on the surrogate’s net pay. The surrogate’s partner may also receive compensation for lost wages if they need to miss work for the embryo transfer procedure or during the surrogate’s postpartum recovery.

Travel costs for medical appointments, including mileage, airfare, lodging, and meal allowances, are generally covered. Mileage reimbursement may apply for distances over 80 miles round trip. Childcare expenses incurred when the surrogate attends appointments or is on bed rest are also reimbursed. Surrogates may also receive monthly allowances to cover miscellaneous pregnancy-related costs like vitamins, parking, or local travel. Additional stipends can include payments for medication starts, embryo transfers, carrying multiples, or undergoing invasive procedures like a C-section.

Factors Influencing Compensation

Several factors can influence the total financial package a gestational surrogate receives, leading to variations in overall compensation. One factor is the surrogate’s geographic location within the United States. States with a higher cost of living or greater demand for surrogates, such as California, may offer slightly higher compensation rates.

The surrogate’s experience level also plays a role in determining compensation. Experienced surrogates typically receive a higher base compensation than first-time surrogates. This increased pay acknowledges their proven commitment and understanding of the process.

The specific surrogacy agency involved and the terms of the legal agreement also impact the financial arrangement. Agencies may have different compensation structures and benefit packages, which can lead to variations in the total amount received. The legal contract between the intended parents and the gestational carrier outlines all agreed-upon fees and reimbursements, ensuring clarity for both parties.

Payment Structure and Timing

The disbursement of gestational surrogate compensation follows a structured schedule outlined in the legal agreement. Base compensation is commonly paid in monthly installments once the pregnancy is confirmed. These payments usually begin after a confirmed fetal heartbeat, often around the eighth week of pregnancy. The monthly payments continue throughout the duration of the pregnancy.

In addition to monthly payments, surrogates receive payments tied to specific milestones in the surrogacy journey. These milestones can include a fee upon starting medication, completing the embryo transfer, or confirmation of pregnancy. The final balance of the base compensation is paid in a lump sum shortly after the baby’s delivery, often within 15 days.

An escrow account plays a central role in managing these payments, ensuring financial security for both the surrogate and the intended parents. Intended parents fund this account, which is overseen by an independent legal or accounting firm specializing in surrogacy. The escrow account is responsible for disbursing not only the surrogate’s compensation and allowances but also other related expenses such as health insurance premiums, medical costs, and travel. Funds must be deposited into the escrow account before the surrogate begins medications for an embryo transfer cycle.

Tax Considerations

Gestational surrogate compensation has tax implications that individuals should consider. The Internal Revenue Service (IRS) views compensation received by a gestational surrogate as taxable income. This means that the income is subject to federal and potentially state income taxes. Surrogates should be aware that they may need to report this income on their annual tax returns.

In some arrangements, intended parents or surrogacy agencies might issue a Form 1099-MISC to the surrogate if payments exceed a certain threshold. This form reports non-employee compensation. It is important for surrogates to maintain thorough records of all payments received and expenses incurred throughout the surrogacy process.

While the base compensation is taxable, certain pregnancy-related expenses reimbursed to the surrogate are not considered taxable income because they are reimbursements for actual costs. However, the specific tax treatment can be complex, and individual circumstances vary. Consulting with a qualified tax professional or financial advisor is advisable to understand specific obligations, potential deductions for related expenses, and proper income reporting. This ensures compliance with tax laws and helps manage any financial impact.