The way we work is changing. With a considerable number of companies adopting remote work, the workplace benefits landscape has shifted. One key example of this is the remote work stipend, which is a popular fringe benefit that employers are offering to their teams.
If your company is looking to be more productive, engage employees, and attract top talent, offering a remote work stipend is essential to achieve those goals. But what exactly is a remote work stipend, and what should it cover?
If you’re like many modern businesses, you’ve probably embraced the idea of remote work. After all, it’s a great way to promote productivity and retention, while also freeing up office space. But did you know that you can also use remote work allowances to your advantage?
A remote work allowance can be beneficial to both you and your workforce, whether you are a start-up, a scale-up, or an enterprise. Stipends and allowances can ensure your employees are productive – and happy – when they are working remotely.
Not only that, but remote work allowances can also help you draw in those top performing candidates, encouraging them to apply for positions, but it’s also a perfect opportunity to gain that competitive edge and stay ahead of the the curve.
Read on to learn more about this topic! Click on the sections below to jump right to your specific question.
- What Is a Remote Work Stipend?
- What Does a Remote Work Stipend Cover?
- What are the Benefits of Work from Home Stipends?
- How Much to Offer for a Work from Home Stipend?
- Are Work From Home Stipends Taxable?
- How to offer Work From Home Stipends at Your Company?
- 5 Examples of Work from Home Stipends from Employers.
- Conclusion
What Is a Remote Work Stipend?
A stipend is a sum of money that’s paid out to a remote employee on a regular, recurring basis.
Due to the explosion of remote employment, many organizations are finding that a salary alone is not enough to attract top talent.
In this case, the work stipend is meant to cover the costs your employee incurs while working remotely. For example, if your employee regularly has to travel 60 miles one-way to get to the office, they might be entitled to a monthly allowance or travel stipend that covers their gas and car maintenance costs.
This stipend is no different. It entitles your workforce to set up their home office and use these funds to cover their specific remote work expenses.
What Does a Remote Work Stipend Cover?
As mentioned above, the stipend can cover any reasonable expenses that an employee might have in a WFH setting.
Laptop and/or smartphone costs- As technology continues to evolve, so too will your employee’s needs. With laptops, high-speed internet, internet security and back-up plans becoming more crucial than ever before, ensuring your employee has what they require is a great way to ensure they’re always productive.
So expect that your employee will want a laptop with a bright screen, fast processing power and up to date software. This means that their work stipend should include any necessary upgrades or repairs that are needed as well.
A survey conducted by Gallup noted that laptops, internet and software accounted for the majority of remote work-related expenses, with cell phones coming in second (read more about setting up a cell phone reimbursement policy).
But cost isn’t always the biggest factor to consider when giving employees a stipend — security is a big factor as well.
All of this is to say that depending on what your workforce needs to do their job, they might need local office equipment such as printers and office supplies such as paper, ink cartridges and stationery. Things like furniture and ergonomic office chairs are also popular requests.
If you plan on providing these items, be sure to verify how much they cost so you can cover them in your stipend policy. And if your staff needs any kind of storage device (such as external hard drives), be sure to include that in your stipend offer as well.
A stipend should cover at least a few of your employees’ most common work-related costs. Some employers are also extending their stipends to include things like education or online courses to upskill their staff.
However, the exact list of items and scenarios you cover with your stipend is open to debate and will likely depend on what your workers require.
What are the Benefits of Work from Home Stipends?
There are plenty of perks for both employer and employee in terms of WFH benefits.
- Attracting top talent and retaining top performers.
As it’s a considerable method to attract top talent. Candidates are more likely to apply for positions that offer a stipend when compared with those companies that don’t.
- Keeps your employees engaged and makes them feel valued.
Work from home stipends are a cost-effective way to engage your employees.
If you offer remote work allowances, your workforce is likely to feel like they’re an integral part of the team and they’re likely to have higher levels of engagement.
Also, in this day and age, salaries alone are not enough to keep your team satisfied with benefits becoming a must in terms of remote workers.
- Alleviates employee costs.
Most people would rather work from home than commute to an office every day, but the costs associated with working from home can be prohibitive.
If you offer a remote work allowance to cover reasonable expenses, and your employees can cover those costs out of their stipend, you’ll have a competitive edge.
By offering work allowances, you can keep your costs low while still giving your employees the compensation they need to be productive. And this is especially true if you’re looking to engage employees in digital work.
- Higher productivity and increased collaboration.
By offering a stipend, you can promote better productivity and engagement among your remote employees. This can be more effective than other similar types of compensation.
It’s no secret that WFH is the preferred way of work for many out there and studies have shown that productivity increases when employees are able to work in their comfortable home environment. Also, they’re more effective when it comes to collaboration because they’re not in the same location.
- Organizational Cost Savings.
If you operate a solely remote workforce, you’re already saving thousands in terms of electric bills, rentals and all those incredibly high costs associated with running a brick and mortar company.
While the cost saving is great for your bottom line, if you don’t offer a stipend, your employees are inevitably shouldering those extra costs.
However when you reimburse workers by letting them purchase what they need to operate effectively from home, it’s definitely WIN-WIN!
On that note, here are some other popular reimbursements and employee stipends that employers are offering to their employees:
- Wellness reimbursement
- Fitness reimbursement
- Corporate gym memberships
- Employee food allowance
- Tuition reimbursement
- Education stipend
- Employee gym memberships
- Day care benefits for employees
- Lifestyle benefits for employees
- Lifestyle spending account for employees
- Some insurance companies offer their own wellness reimbursement program as well, such as the Cigna gym reimbursement program, humana wellness program, or Go365 program by Humana
How much to offer for a Work from Home Stipend?
The amount you offer for a work from home stipend will depend on your company’s financial situation, as well as the type of remote worker benefits package that you offer. It also depends largely on what needs to be covered.
Most companies tend to offer between $1,000 and $3,000 per year for a remote work stipend, which is often split into bi-monthly or monthly payments.
If you want to attract top talent to your company, consider offering a higher stipend than the one recommended by similar organizations in your industry. In addition to attracting top talent, it can also help you retain employees who could be tempted by other companies offering more cash in their compensation packages.
However, if you don’t have the financial resources available to offer a remote worker benefits package with a work-from-home stipend included, there are other options available. You could try providing employees with extra vacation time to use during their off-site work days if they don’t have access to a company workspace.
You could also offer to pay for a portion of the costs associated with setting up an employee’s home office, such as their computer and any other equipment they might need to complete their work. This can help ensure that all employees have access to the same resources, even if they’re working remotely.
Are Work From Home Stipends Taxable?
In most cases, stipends are taxable. This means that you’ll need to pay taxes on the stipend amount, in addition to any other wages or benefits your employee receives.
Stipends are considered income, so it’s important to include them when calculating your employee’s tax liability.
Stipends can be taxed differently depending on how they’re paid out and how long the employee has been working for your company.
If a work-from-home stipend is paid out as part of their annual salary or as a one-time payment, it might not be taxed until the end of the year. If it’s included in a monthly paycheck, however, it could be taxed each month.
You should check with your accountant if you aren’t sure whether or not your employees will have to pay taxes on their work-from-home stipend.
How to offer Work From Home Stipends at Your Company?
Many employers are offering more remote work benefits to their employees.
In order to offer a remote work stipend, you’ll need to make sure that your company has the right policies in place. If you don’t have any remote work policies in place yet, it’s a good idea to start thinking about what you would need in order to make your company more flexible and open when it comes to work-from-home options.
Here are some of the ways that you can start paying employees who work from home:
- Offer a specific amount of money per month or week that they can use for their internet and/or phone service or any other expenses they might need to cover.
- Offer a set annual amount that can be used for repairs, software subscriptions or office supplies. This is perfect for seasoned WFH employees because they’ve already established their home office and simply need funds to maintain their set up.
- Start-up stipend – If your staff members are new to WFH you can offer them a once off payment to help get them up and running. Not saying that you have to pay for everything, but perhaps provide a set amount and let your remote employee pay the difference.
*Note: Be sure to include all necessary information in your policy and ensure that your employees understand what they can and cannot spend their stipend on.
Having a work from home stipend policy in place is a great way for your company to be able to offer remote work without compromising the company’s culture or reputation.
It also allows you to manage remote working employees better, as you can provide more specific guidelines and give them more clarification on what they can and cannot do with their stipend.
5 Examples of Work from Home Stipends from Employers
Many companies have been offering these stipends to cover their remote, hybrid or coworking personal for some time but it’s only recently come into the spotlight due to the huge volume of employees having to WFT due to the pandemic.
Here is what some of the larger organizations are offering as work from home stipends.
1. Amazon
A few years ago, Amazon started offering a work-from-home stipend to its employees. This stipend is paid out in two different ways:
- Monthly
Stipends are paid on a monthly basis and are based on their performance rating and the amount of time they spend working from home each month. The higher the performance rating, the more money that your employee will receive.
- Annually
Stipends are paid out as bonuses at the end of each year and are based on their performance rating during the year. The higher the performance rating, the more money that your employee will receive at year-end.
2. PwC
PwC offers a work-from-home stipend to employees who work in its offices in New York City and Chicago, Illinois, as well as its other locations around the world. This stipend is offered through PwC’s Flexible Benefits program.
3. Google
In the past four years, Google has offered a work-from-home stipend to its employees. Free high-speed internet with unlimited data and a laptop (desktop or netbook)
4. T-Mobile
T-Mobile USA has offered its employees a work-from-home stipend of $2,000 per year. They also offer wellness services and other company perks included in their benefits packages.
5. eBay
eBay started offering a work-from-home stipend to its employees who have a high level of skills and expertise related to eBay’s online platform.
6. Netflix
In 2013, Netflix offered its employees a work-from-home stipend of $1,000 per month if they worked from home for 20 hours per week or 80 hours each month during peak season (usually from June to August).
Wrapping Up
In conclusion, as an employer, offering a work-from-home stipend to employees may be one of the best ways to attract and retain remote workers. If you would like to learn more about fringe benefits, check out this guide on the different types of fringe benefits you can offer.
If you’re thinking about implementing a remote work stipend, IncentFit can help. We offer a work-from-home stipend and expense management program through our Lifestyle Reimbursements product. Our Lifestyle Reimbursements product allows you to offer stipends to your employees while they’re working from home, at their own pace.
Our program is intuitive and easy to navigate. We’ll give you all of the tools you need to ensure that your employees are fully compensated while working from home!
