In recent years, surrogacy has become a more familiar and celebrated path to parenthood—not just for intended parents, but also for the incredible women who choose to become surrogates. For many surrogates, the decision is rooted in a deep desire to help others experience the joy of having a child. But alongside the emotional and altruistic reasons, compensation is also a key consideration—and rightly so.
Becoming a surrogate is a serious commitment, physically, emotionally, and logistically. It’s also a role that comes with financial reward. But how much do surrogates actually take home? Is the compensation taxable? What should you expect after taxes and deductions? These are smart and important questions, and this blog is here to offer a clear, realistic look at surrogate pay and taxes.
Understanding Surrogate Compensation
Surrogates in California can typically expect to earn between $45,000 and $75,000 for a successful surrogacy journey. However, the total amount can vary widely depending on a few factors:
- Experience: First-time surrogates often receive lower compensation than those who have completed prior journeys.
- Location: Compensation can differ by region, especially when factoring in cost of living.
- Agency vs. Independent Surrogacy: Agencies may offer more structured and transparent compensation packages.
- Type of pregnancy: Carrying multiples or undergoing invasive procedures may lead to additional bonuses.
- Health insurance status: If a surrogate requires a new insurance policy, additional compensation is often included to offset the cost.
What Else Is Included?
Surrogate compensation goes beyond the base pay. Most compensation packages also include reimbursement for:
- Maternity clothing
- Travel expenses (for medical screenings, embryo transfers, delivery, etc.)
- Lost wages (if the surrogate has to miss work)
- Childcare and housekeeping support
- Health and life insurance coverage
- Monthly allowance for incidentals during pregnancy
These additional benefits can add $10,000–$20,000+ to the total value of the compensation package. But when we talk about how much surrogates make after taxes, it’s important to focus on the base compensation, since that’s the amount potentially considered income by the IRS.
Gross vs. Net Income: What’s the Difference?
When you see that surrogates “make $60,000,” that number typically refers to gross compensation—the total amount agreed upon before any taxes, fees, or deductions.
Your net income is the amount you actually take home after applicable taxes or expenses.
Why does this matter? Because without understanding how taxes may apply, some surrogates are surprised when they owe more (or keep less) than expected. Being financially prepared starts with knowing the difference between gross and net income—and planning accordingly.
Is Surrogacy Income Taxable?
This is where things get a little tricky. Surrogate compensation exists in a legal gray area when it comes to federal taxes. The IRS hasn’t issued formal guidance specific to surrogacy, which means:
- Some agencies and intended parents do issue 1099 forms, classifying the payment as taxable income (especially if there is no medical reimbursement agreement in place).
- Others do not issue a 1099, treating the compensation as a non-taxable reimbursement or gift.
We explain this in more detail in our related blog: Can You Claim Surrogacy on Taxes?
Here’s what’s important to know:
- If you receive a 1099, you are required to report that compensation on your tax return. This could classify you as self-employed for that income, which means paying income tax and self-employment tax (Social Security + Medicare), which can take up to 30–40% of the total.
- If you don’t receive a 1099, you may not need to report the compensation, especially if it was structured as a reimbursement for medical-related services. However, this is not guaranteed protection from audit or IRS inquiry.
That’s why we always recommend consulting with a qualified tax professional who has experience in surrogacy compensation. They can help you understand your individual situation and prepare accordingly.
Estimating Take-Home Pay After Taxes
Let’s look at two example scenarios to help clarify what you might actually take home:
Scenario A: No 1099 Issued
If a surrogate receives $60,000 in base compensation and no 1099 form is issued, there are typically no taxes withheld upfront. In this case, the surrogate may be able to take home the full $60,000. However, it’s important to understand the caveat here: if the IRS later audits your return or if you choose to report the income independently, you may be responsible for retroactive taxes. The classification of this income can vary depending on how the compensation is structured and the language in your surrogacy contract.
Scenario B: 1099 Issued, Self-Employed Classification
If a 1099 is issued, the situation changes significantly. The same $60,000 in base compensation may be subject to self-employment tax, which is approximately 15.3%, totaling about $9,180. Additionally, federal income tax may apply depending on your tax bracket—potentially another $5,000 or more. This means the estimated take-home pay after taxes could range from $45,000 to $47,000. It’s important to note that tax obligations will vary based on individual circumstances, including your filing status, dependents, and any other sources of income.
Possible Deductions
If your surrogacy income is taxed, you may be able to reduce your overall tax burden by claiming relevant deductions. These might include travel expenses to medical appointments, childcare costs during procedures, legal or agency fees you personally covered, and certain out-of-pocket medical costs not reimbursed or covered by insurance. These deductions can help offset the amount of taxable income, but eligibility and documentation requirements vary, so it’s essential to review them with a qualified tax advisor.
Should Surrogates Set Money Aside for Taxes?
If there’s any possibility that your compensation may be considered taxable, it’s a smart move to set aside 25–30% of your payments until you file your taxes.
You might also consider making estimated quarterly tax payments to avoid IRS penalties. Your tax advisor can help calculate those payments based on your expected earnings.
Even if you ultimately don’t owe taxes, it’s better to be prepared than caught off guard.
Surrogacy and Financial Empowerment
For many women, surrogacy is not just about helping someone else start a family—it’s also a chance to create opportunities for themselves and their loved ones. Surrogacy compensation can be a powerful tool when used wisely. Many surrogates use their earnings to:
- Pay off credit card or student loan debt
- Save for a down payment on a home
- Invest in education or career advancement
- Create a financial cushion for their families
- Take a well-deserved vacation or personal wellness retreat
When paired with intentional planning, surrogacy can be both a gift to another family and a life-changing step forward in your own journey.
That’s why it’s so important to work with an agency that offers transparency, guidance, and ethical practices around compensation.
Choose Surrogacy By Faith
At Surrogacy By Faith, we believe that every surrogate deserves clear, honest, and respectful information about compensation—before, during, and after the journey. We’re proud to serve women who feel called to help others while also supporting their own goals and families.
When you work with us, you’re entering into a relationship based on trust, care, and mutual respect. We’re here to walk you through everything. If you’re interested in becoming a surrogate or pursuing parenthood through surrogacy, fill out our surrogate form or intended parent form today. We’ll be with you every step of the way to help build the family of your dreams.