Paid vs. Unpaid Internship: Key Differences Between Them

Updated June 9, 2023

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Internships can be an important tool for learning more about your chosen field or industry's typical skills and work environment. Paid and unpaid internships offer experiences that can help you make long-term decisions about your career. Understanding the similarities and differences between these two internships can help you determine which offers the most benefits to you.

In this article, we define a paid and an unpaid internship, describe what they offer, share the benefits of each type and provide tips for choosing which type is right for you.

What is a paid internship?

Paid internships are training programs for college students, recent graduates and those looking for an on-the-job experience that involves financial compensation. For many individuals new to the workforce, paid internships are one of the first paid job experiences they might have in their chosen field. As a paid intern, you often perform duties in an environment similar to where you hope to pursue your career. While performing these duties, you learn more about your intended career, how the workplace operates and earn compensation from your employer.

What is an unpaid internship?

Unpaid internships are internships without financial compensation. Since many unpaid interns are also students, they can often receive college credits for their labor. To qualify as an unpaid internship, the program must follow several United States Department of Labor guidelines. They include:

Both the employer and the intern understand the role is unpaid.
The intern receives similar training as they would in school.
The intern observes without replacing or performing the job duties of a paid employee.
The program benefits the intern without a direct benefit to the employer.
Employees supervise and mentor the intern.
The employer makes no promises that employment will be available at the end of the program.
The internship only lasts as long as the employer can provide an educational experience for the intern.

To offset the costs of an unpaid internship, some universities and organizations award funding to students enrolled in these programs. If you're a student, consider inquiring with your campus career resources office to see if it has any information regarding organizations or opportunities for internship funding. You can also inquire with the company you plan to intern with to see if it offers a travel stipend to help with the costs of commuting to and from the internship site.

Similarities between paid and unpaid internships

Both paid and unpaid internships offer similar benefits to the intern, though each can offer their own experiences. Some of the most important similarities paid and unpaid internships share include:

Focus on education and training

The primary focus of either a paid or unpaid internship is for the intern to receive the training they need to prepare for their career. This includes learning how to perform important tasks within the field and how businesses typically operate. As an intern, you can also learn directly from colleagues by watching them do their job and asking them questions about their duties.

Help in finding employment

Both paid and unpaid internships can lead to employment once the internship ends. Though employers of unpaid interns are unable to promise a position as part of the program, they can still choose to hire you if they think you perform well during your internship. They could also recommend you to other employers when you apply for other jobs in the field.

Networking opportunities

Either internship type can help you meet experienced members of your field. This can offer several benefits to you as you begin your career. Through building a network, you can connect with people who can help you find areas of improvement and learn new skills. If you have experience working with these people directly, they can become references when you apply for other jobs. Some colleagues can even help you find job openings or introduce you to employers they know who are currently hiring.

Differences between paid and unpaid internships

There are also some important differences between paid and unpaid internships. Some major differences between the two include:

Compensation

Paid internships compensate you with money for your time and effort, and college credit may also be an option. Unpaid internships often compensate you with just college credit. Understanding this difference can help you determine which internship fits your needs best. If you're a current student and your major requires internship credit, you might consider a paid or unpaid internship to fulfill this requirement. If you've already graduated, a paid position might work best, as this allows you to divert all your professional time toward the internship without needing another job to earn an income.

Types of experience

Paid internships are more likely to help you gain practical experience with the typical tasks and duties of your intended career. As an unpaid intern, your responsibilities might be adjacent to the ones you might perform during your career, as employers can't task you with the same duties paid employees handle. You can still learn valuable information about how employees work together in your field. You can also learn about your future tasks at an unpaid internship, though this experience might manifest as observing others as they perform their jobs.

Employment opportunities

As part of a paid internship, employers can make a paid position available to you for completing the program. However, it's important to understand this is a possibility rather than a guarantee. When this is part of a paid internship program, though, it may add value to the program. Since employers of unpaid interns can't promise a position as part of the program, it's helpful to determine whether the experience they offer is what you want or need.

Program availability

The availability of paid or unpaid internship programs might differ depending on your local area. In some places, there are more unpaid intern positions than paid ones. Your ability to travel, financial needs and chosen profession can also affect the availability of internships for you. It's best practice to research the type of internship you intend to apply to several months before the program start date. Submitting your applications on time helps ensure that internship program managers consider you.

Value of experience

Because the two types of internships can sometimes offer different experiences, the value of those experiences can also differ. For instance, an unpaid internship might help you learn about a workplace, while a paid internship might help you learn new skills for your resume.

To determine the type of internship most beneficial to you, it's helpful to figure out what you need from it. If you hope to learn about a work environment to help you decide whether the career is right for you, you might consider an unpaid internship. If you've decided on your career and hope to begin soon, a paid internship might align more closely with your goals.

Benefits of paid internships

Here are some benefits you might receive from completing a paid internship:

Financial gain: The ability to earn money from your internship might help you meet your financial goals and support yourself at the beginning of your career.
More responsibility: Because paid interns can perform similar work to that of full-time employees, you might handle more involved tasks in your role.
Credibility: A paid internship might add more credibility to your resume, especially if you've gained valuable experience performing vital responsibilities for your employer.

Benefits of unpaid internships

In some situations, an unpaid internship might provide you with more benefits. Here are some potential benefits:

Opportunities in your field: Unpaid internships can be more common in some fields than others, and being open to them might allow you to take a position in your target industry to build connections.
More training: Because unpaid internships focus heavily on providing students with educational experiences, you might benefit from resources, training sessions, demonstrations and development opportunities that can enrich you and build your skills.
Fulfillment of graduation requirements: Some schools and degree programs require students to complete an internship with an organization related to their major. Working an unpaid internship could help you graduate with your degree.

Tips for deciding between a paid and unpaid internship

Below are some tips that might guide you when weighing paid and unpaid internships and deciding which is best for you:

Define your needs. It's important to reflect on your living arrangements, travel capabilities and financial obligations to determine if you can sustain your lifestyle on an unpaid internship.
Reflect on your future goals. Knowing what you hope to gain from the internship could also help you understand which program better suits your career path.
Learn more about the company. Before accepting an internship, research the company culture to know if you could see yourself staying with the company and growing your career there.

Research industry standards. Learn what types of internships are most common in your industry so that you can make the right choice for pursuing your unique ambitions.

This article is for information purposes only and is not intended to constitute legal advice. Consult with an attorney for any legal issues you may be experiencing.