Earning Income in the United States: The J-1 Intern and Trainee Compensation Guide

J-1 Intern and Trainee programs allow foreign nationals to gain experience and advance their professional skills at an American business. These programs are an excellent opportunity for professionals of all levels, across all industries, who need to learn new skills and methodologies or gain exposure to U.S. business practices, all while immersing themselves in American culture. 

While many mid- and high-level employees use J-1 programs for a variety of reasons, including additional training or connecting with American teams, it’s common for foreign citizens to take advantage of them early on in their careers. Due to the nature of these temporary programs, many people wonder what the compensation requirements are for J-1 Interns and Trainees—or if J-1 Interns and Trainees can even earn compensation. Let’s dive in. 

Can J-1 Interns and Trainees Earn Wages? 

Yes, J-1 Interns and Trainees can earn income. The J-1 Intern and Trainee visas provide foreign citizens with legal work authorization in the U.S. during a fixed period. This allows them to earn compensation legally and qualifies them for a Social Security number. 

What are J-1 Intern and Trainee Compensation Requirements? 

All employers must abide by federal, state, and city wage and labor laws. While regulation does not stipulate a base salary for Interns and Trainees, compensation is expected to: 

• Align with industry standards 
• Be paid at rates comparable with American counterparts 

This ensures that J-1 Interns and Trainees are paid a fair and reasonable wage at their U.S. host company. Trainees should always be paid by their U.S. or home employer for their full-time contributions in the U.S. To test the legality of a low pay rate, J-1 holders can use the Department of Labor’s Factsheet 71. 

Can J-1 Internships be Unpaid? 

While Trainees must be paid, unpaid internships may be acceptable. It’s advised that Interns receive the equivalent of minimum wage or higher (relative to the industry standard); however, low or unpaid internships are possible as long as the primary beneficiary test outlined in the Department of Labor’s Factsheet 71 can be passed. 

How do J-1 Interns and Trainees Get Paid? 

Payroll is handled by the U.S. host company. Before starting their position, J-1 holders must be made aware of their pay rate, pay schedule, and payroll deductions. This information must also be present on all federal documents. 

Wages can come in the form of salaries, stipends, and reimbursements, and they may be paid at any interval, i.e., weekly, bi-weekly, monthly, or lump sum. Electronic payments are often preferred by J-1 holders to more easily maintain the use of their international bank accounts; however, J-1’s do qualify to open a U.S. bank account to help accommodate check payments. Please note, it is ill advised to compensate J-1 holders under a contractor classification, as their positions do not fall within the definition of a contractor.  

J-1 holders are advised to obtain a Social Security number. They can apply for this after arriving in the U.S. and validating their visa with AIFS Professional Pathways. 

Are J-1 Holders Subject to Taxes or Other Payroll Deductions? 

J-1 holders who are receiving income are subject to federal, state, and local income taxes and most deductions that apply to standard employees.  
 
However, J-1 holders are exempt from FICA (Social Security and Medicare contributions) and FUTA (unemployment benefits), as they cannot receive these benefits.  
 
J-1 holders are required to file tax forms, regardless of whether they received income, for any period of time they participated in their program in the U.S. For example, if they train in the U.S. from May to August, they must file taxes before April 15 of the following year. 

AIFS Professional Pathways—Your J-1 Intern and Trainee Visa Program Partner 

While figuring out compensation, determining eligibility, and going through the J-1 visa application process can be challenging, AIFS Professional Pathways, an official J-1 Intern and Trainee visa program sponsor, makes it easy. We offer many valuable services, such as 24/7 emergency support, comprehensive insurance, and unmatched customer service. With AIFS Professional Pathways, J-1 participants can focus on gaining valuable experience in the U.S., knowing they have the guidance and support they need every step of the way. 

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