Participant Payment Vendors

On This Page: Characteristics of Participant Payment (SP) Vendors | Exceptions to the Use of SP Vendors | Steps to Create an SP Vendor in KFS

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Characteristics of Participant Payment (SP) Vendors

  • Do not need a W-8 or W-9 to establish.
  • SP vendor record submissions are reviewed and approved by the DV Vendor Approval Workgroup in Accounts Payable. This AP team checks to ensure that a PO or DV vendor record does not already exist for the vendor.
  • Maximum payment: $400 per calendar year. If you anticipate that a study participant will be paid more than $400 (from participation in one or multiple studies), inactivate the Participant Payment vendor record and create a DV vendor record for that participant.
  • Can only receive DV payments on DVs that use the "Payment to Research Participant" payment reason code.

Additional Considerations

  • The payment should be made to the subject participant. This means that if the participant is a minor the vendor record should be created with the minor’s name and payment should be processed to the minor’s name.
  • Foreign individuals can be set up as participant payment vendors. Note that 30% tax withholding is required on these payments to foreign vendors.

Exceptions to Use of SP Vendors

IU Employees

IU employees who receive payment for research participation should NOT be established as SP vendors. Instead, they should be paid on a DV using their Employee Payee record.

$400 Annual Payment Limit

Participant Payment vendors earning above $400 in a calendar year may remain Participant Payment vendors when participating in a confidential study. In such cases, include a note on the DV to indicate that the study is confidential.

When a foreign vendor takes part in a confidential study, University Tax Services will “gross up” a foreign vendor’s participant payment by 30% and will charge the department the difference.

In the event of an IRS audit, the department must have documentation to confirm that the study was confidential. If not, the department will be responsible for tax, interest, and other penalties.

Steps to Create an SP Vendor in KFS