Yes, 'American Idol' hopefuls who make it past auditions and onto the show are compensated for the televised performances they give (more on that below). That said, the contestants take considerable risks—like quitting their day jobs, for example—and incur other expenses relating to travel to be on the show. Per The Hollywood Reporter , the show gives contestants a wardrobe allowance of $400 per episode (and, yes, they can keep the clothes), but this contribution is rarely adequate given the high cost of the designer threads, so contestants often have to dip into their own bank accounts for that, too.
There are other paydays for 'American Idol' contestants—particularly those who make it to the top 12 and participate in the summer tour. Per the report, this opportunity involves four to five months of touring and yields about $150,000 for each contestant on the tour.
As you can imagine, more money is to be had the farther you make it. The top four rake in considerable cash for the Disney World commercial they're featured in and other money-making opportunities arise as their celebrity grows—a fact that has allowed contestants to enjoy lucrative careers even if they don't win first place and earn the coveted 'Idol' title.
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