A Complete List of Lifestyle Spending Account Eligible Expenses

A lifestyle spending account, or LSA, is a non-salaried allowance that employees spend according to their personal preferences. Unlike a flexible spending account (FSA) or health savings account (HSA), an LSA is fully funded by the employer and considered taxable income. Employers outline a set of parameters for their lifestyle spending account, including contribution amounts, funding cadences, eligibility rules, rollover policies, and allowed spending categories. 

Lifestyle spending accounts are a unique way to demonstrate you care about your employees both personally and professionally. They often increase engagement with HR programs, boost retention, and improve recruitment. But how do you set them up? 

This guide suggests 26 different pillars, or eligible spending categories. Think of them as the ABCs of lifestyle spending accounts. 

Lifestyle spending accounts ABCs: 26 pillars of spending

With an LSA, companies can work with their lifestyle spending account vendor to support a wider variety of needs. They can allow workers to personalize their benefits according to some of the following unique preferences: 

A: Adoption assistance

Adoption assistance is a great LSA perk to consider, with 34% of employers now offering paid adoption leave, according to SHRM’s employee benefits survey. The report revealed an increase in the number of organizations participating and first-time providers of benefits. 

Additionally, the financial reimbursement for adoption increased by 23.5% compared to 2022, for an average of $14,831 plus nine weeks of paid leave. However, leading organizations such as American Express reimburse employees up to $35,000 of adoption and surrogacy costs for up to two children. 

B: Brooms

Brooms?! Yes, some organizations add cleaning services as a pillar of their LSA program. These home services stipends are sometimes rolled up into WFH benefits because they create a better working environment for remote employees. They might include cleaning services, trash pickup, pet care, and more. For anyone returning to the office (and possibly commuting long hours), a stipend toward a cleaning service will also go a long way in improving work-life balance. 

C: Commuter costs 

With gas prices climbing 14% this year, it’s no surprise to see concerned employers adding gas and other commuting costs to their LSA programs to support employees in attending the physical workplace. 

Case study: The Community Group, a private nonprofit organization creating opportunities through education in the Boston area, has added it as a new category to their LSA program. 

“We want to show that we are aware of current issues,” said Katie Graham, Chief Strategy Officer. “It's easy to call Benepass and ask, ‘Can we make sure that is covered?'” 

D: Day at the spa 

Spa, salon services, and other wellness activities are popular LSA pillars that improve mental wellness, retain talent, and lead to a happier and healthier workforce. 

Case study: Talkspace recently launched a modern wellness plan to give their new fully remote workforce the perks they were looking for. 

“When we moved to a remote model, we saw that there was a need to take care of people,” explains Hallie Griffin, Virtual Office Manager. 

Massages and spa days are eligible expenses under Talkspace’s LSA program. Today, employees receive a $50 monthly stipend they can spend on spa services, haircuts, nail appointments, Instacart for groceries, incense, candles, gaming, and so much more. The program has a 97% engagement rate, with increased utilization among the company’s international teams. 

E: Entertainment

Entertainment or cultural experience funds allow employees to feel fulfilled in their personal lives, enabling them to bring their best selves to work. LSA funds can pay for:

• Concert or movie tickets
• Streaming services
• Podcasts
• Spotify subscriptions
• Books

F: Fertility assistance 

The average cost of a single in vitro fertilization (IVF) cycle in the U.S. today is $23,474, according to FertilityIq. This number doesn’t include supplemental treatments that physicians often recommend, such as acupuncture, nutrition planning, meditation, and fitness classes. Many people require two to three IVF cycles, bringing costs to a whopping $50,000+.  

A flexible family benefits program in the form of an LSA will allow your employees to achieve their dreams of building a family, regardless of the path they need to take to get there. Employer-funded accounts like these support your team members on their family formation journey while delivering the freedom to spend on the items and services that make the most sense for their unique situation.

G: Groceries and food 

Before hybrid and remote work became the norm, food perks at work basically meant pizza parties and some on-site snacks. But now, companies can create a meal allowance enabling employees to spend their lifestyle spending accounts on groceries, food deliveries, meal kits, or restaurants. 

Employees can choose the food that best fits their lifestyle, creating a more equitable experience for people in rural areas with fewer delivery options.

Case study: Wix, the leader in website creation, experienced these differences firsthand before they moved from a Grubhub account to Benepass. Today, staff members receive a biweekly allowance directly into their Benepass account. The flexibility of their food account empowers people to choose what food options most benefit them and their families. 

“The situation of the pandemic impacted everyone in their unique way,” said Noam Bacharach, Senior Director, Head of U.S. Operations and Workplace Experience. “We found that when we switched to Benepass, we provided much more of a robust solution that can accommodate everyone’s personal needs.” 

H: Home office supplies 

While it’s undoubtedly more expensive to commute, working from home costs money too. From setting up a home office to paying for broadband, these costs can eat into your employees’ finances. 

Case study: Technology organization Jamf, carefully considered what home office equipment employees needed and extended its work from home stipend to include items such as tea and coffee equipment, under-the-desk treadmills, and mug warmers. Allen Houchins, VP of IT & Facilities, explains: 

“Benepass helped Jamf employees transform their homes into functional and productive offices. By partnering with Benepass, we engaged 98% of our employees worldwide! We’ve extended this benefit to all new hires, and they love it too!” 

I: Individual needs 

Employers often struggle to offer personalized benefits for their employees, mainly because of the breadth of vendors required to meet everyone’s specific needs. 

But with a lifestyle spending account, people customize their benefits to their requirements. LSA-eligible items include acupuncture, gym subscriptions, child care, grocery delivery, laundry services, professional coaching, charitable donations, and more.

J: Jackets and other work wear

Jackets and other necessary work wear such as uniforms or personal protective equipment in certain industries can become quite costly, especially when workers must pay upfront before being reimbursed. 

Case study: YorkHoist is recognized as the leader in the overhead crane and material handling industry, and a category of their lifestyle spending account program is work-appropriate shoes and apparel. The Benepass platform and Visa card eliminates the need for reimbursements and expense report tracking; once an employee makes a transaction, they can easily track it via the mobile app. 

“Employees can manage their accounts themselves, which I love,” said Denise Myers, HR Manager. “It allows them to monitor their transactions and reclassify their transactions as they desire.”

K: Kids (childcare) 

Childcare is often one of a household’s biggest expenses, with daycare costing an average of $321 per week/child. Many working moms have left the workforce entirely, with 52% of them reporting they would need more affordable childcare to return to work. 

Supporting working parents is easier with an LSA. Lifestyle spending account dollars can go toward childcare, tutoring, activities for children, and more. Other key LSA pillars, such as home services and food deliveries, can also make life easier for working parents. 

L: Loans

Student loan repayment is a unique employee benefit that supports your people’s financial wellness. Instead of seeing their employees burdened by the debt of tuition they received years ago, some employers are willing to contribute toward their ongoing repayments. 

For example, PwC offers a benefit where they pay up to $1,200 a year toward student loans. Over time, this may reduce student loan principal and interest obligations by $10,000 and shorten loan payoff by up to three years. 

M: Mental health 

Mental health is one of the key pillars of wellness, and something essential in the modern workplace. Resume Lab reports that two-thirds of employees have experienced work-induced mental health problems in the past year, and 68% have taken time off work as a result. Employers can support mental well-being in numerous ways, including using an LSA to fund a variety of resources. 

Case study: Mindbody, a software platform for the wellness services industry, supports seven dimensions of wellness: physical, emotional, intellectual, spiritual, environmental, social, and occupational. They built a comprehensive wellness expenses program with Benepass that offers mental health and mindfulness support. 

“Benepass allowed us to close the gap between ‘meat and potatoes' benefits like health insurance and offer a new self-care component,” said Mia Valunte, Benefits Manager. 

N: Nutritionist 

A well-run wellness program should promote good nutrition. While some of your workforce may need a few pointers in terms of nutritional knowledge, others may find it challenging to afford healthy ingredients. Cleveland Clinic reports that 46% of Americans view healthy food as being too expensive, and 23% lack the time to cook healthy meals. 

In designing a lifestyle spending account, you can include payments for dietitian consultations, nutritionist coaching, supplements, or healthy meal delivery kits to support your workers with the cost of eating well and any specific dietary concerns. 

O: Occupational wellness 

Occupational wellness is about finding fulfillment in the workplace and maintaining a healthy work-life balance. Although it looks different for everyone, some common elements of occupational wellness include job satisfaction, work-life balance, and professional development opportunities. 

With an LSA, you can provide flexible career development benefits to prove your company cares about professional growth for all. Often, this leads to high performers staying longer and training the people who follow them, building a brighter future for your company. Employees can use their lifestyle spending account to pay for Masterclass, online courses, conferences, books, certifications, and more.

P: Pets

66% of U.S. homes own a pet, each spending an average of $4,800 last year on food, treats, veterinary care, toys, and clothes. Subsidized pet insurance is one way to support pet owners with the cost of vet services. Flexible pet care stipends are another option available through an LSA that covers a wider range of pet expense categories, such as toys, food, dog training, and other supplies. 

Employees may also pay for dog walking or pet sitting, a huge plus for anyone who welcomed new pets during the pandemic but must now return to the office or work hybrid schedules. 

Q: Quality time with coworkers

Strengthening relationships between coworkers can have a positive impact on overall company culture and employee satisfaction. Recent research finds that 69.5% of people would be happier if they experienced deeper connections at work, so perks that enhance these relationships can lead to more engaged employees. 

Case study: Automox, a technology company, implemented AX Connect, which is designed to foster professional and social connections at work. A fun feature is built right into Slack called "random coffee," where employees are paired for a physical or virtual coffee date they can pay for with Benepass funds. AX Connect is the most utilized feature of their perks program, with an engagement rate of 49%. 

R: Rewards and recognition 

Companies that recognize their employees’ achievements, however big or small, inspire a sense of pride, loyalty, and teamwork. They might use formal recognition programs to acknowledge specific work achievements, tenure, or company values. 

Unfortunately, some employers struggle with low participation rates due to poor program structure or rewards that are not particularly motivating or easy to use. Gift cards are often forgotten, and spot bonuses don’t feel particularly special. Companies can instead add flexible monetary rewards to an LSA that employees can use for anything. 

Automox’s Elspeth Arnold, Manager of People Experience, explains: 

“Employees prefer to have money added to Benepass because it’s permission to spend it on something that isn’t utilities or groceries,” said “They can spend it on something for themselves.” 

S: Stress management 

35% of U.S. workers experienced moderate rates of burnout in 2023, while 22% fell into the high or very high rates of burnout categories. It makes sense then, that companies want to invest in stress management to support their workforce and curb turnover. 

Stress management programs often include educational seminars on identifying burnout, improving resiliency, coping with stressors, and maintaining work-life balance. They may also include courses on fitness, yoga, meditation, or nutrition. 

LSA programs offer employees various outlets to reduce stress. These could include the items mentioned above, childcare support, a massage, or a cleaning service. 

T: Travel

Commuting to work is just one type of travel, and it’s not the fun kind. In this category, we’re talking about personal travel benefits, which ensure employees feel well-rested and more present at work. 

With a lifestyle spending account, some employers offer travel and vacation stipends covering airfare, rental homes, and other vacation expenses. 

Case study: Companies like Seres Therapeutics roll travel and vacation benefits into their LSA, recognizing the restorative impact of stepping away from work to travel and relax. 

U: Understand what your employees want

This isn’t an official lifestyle spending account category, but it’s about ensuring the benefits you offer are in line with your employees’ expectations. Surveying your employees remains one of the best ways to gain real-time insights into the spending categories and eligible expenses that would make the biggest difference in your employees’ lives.  

Employee surveys also enable you to benchmark your offerings against companies of a similar size and industry to ensure your total rewards package is competitive. After conducting a survey, share the results with employees and highlight the steps you will take to implement the feedback. 

V: Video games

Gaming is better for mental well-being than most people realize. A Power of Play report revealed that 71% of people considered video games a stress reliever, 55% say it combats isolation, and 64% use gaming to face everyday challenges. 

Case study: Talkspace’s wellness plan provides workers with $50 each month to spend on eligible categories, including gaming. 

W: Wellness 

Employees increasingly look to their employers to support their physical health and wellness, but a MetLife report highlights vast differences between how staff members rate their well-being compared to their employers’ perceptions. For example, 87% of employers believe their workers are physically healthy, but only 67% of team members agree. A 20% gap also exists in perceptions of mental wellness. 

Organizations can support this by implementing wellness stipends to create a physically and mentally healthier workforce, strengthening the company culture, reducing turnover rates, and increasing employee engagement. 

With the right LSA program in place, an organization can support many pillars of wellness, including physical, mental, occupational, and financial health. Eligible categories could include gym memberships, student loan debt repayment, personal or professional development, and more.

X: Xylophone lessons (personal enrichment) 

Personal enrichment programs such as art, music, photography, or cooking classes add tremendous value to your employees’ lives. Engaging in creative work also encourages us to use different parts of our brain, developing previously untapped problem-solving and thinking skills. 

Leading organizations incorporate personal enrichment as a key pillar in their LSA programs. Employees can use these flexible LSA funds to pay for creative endeavors or hobbies. 

Y: Yoga 

Yoga aligns well with wellness, physical fitness, and personal enrichment. However, what’s unique about an LSA program is that it offers flexibility on where your employees can use their yoga dollars. Flexible stipends allow employees to try out a local yoga studio, attend a virtual yoga class, or join a major gym chain. 

Hallie Griffin, Virtual Office Manager at Talkspace, explains the value of using their Benepass Visa card at any wellness vendor around the world. 

“Does the catalog know about the local yoga store in Israel? I don’t know. I liked that Benepass was uniquely able to support our global team.” 

Z: Zoo tickets

Okay, we’ve run out of ideas here. But zoo tickets fall firmly within the family entertainment bracket, and who’s to say they aren’t a great LSA perk? You're encouraging team members to spend time outdoors with family, friends, or coworkers. Sounds like a win-win in improving mental well-being and increasing presenteeism to us. 

What isn’t eligible under an LSA?

Lifestyle spending accounts are increasing in popularity, with Mercer reporting that 70% of companies are considering adding them to their benefits package. For those employers, it’s essential to understand how they work. While we’ve covered 26 amazing examples of what can be included in an LSA, it’s important to understand what isn’t eligible, including: 

• Pre-tax benefits like Health Reimbursement Arrangements (HRAs), Health Savings Accounts (HSAs), and Dependent Care FSAs (DCFSAs). However, DCFSA dollars can only be used on items that directly allow the working party to go to work, such as preschool and summer camp tuition. 
• Commuter benefits: The monthly maximum amount set by the IRS that you can deduct pre-tax is currently $300 for transit and $300 for parking. Organizations can also decide to offer a pre-tax commuter program, or they can add commuting costs as a pillar of their LSA program. With the latter option, organizations can also cover items such as gas or ridesharing services.

Build your lifestyle spending account with Benepass

Benepass makes it easy to set up an LSA in four simple steps: 

1. You’ll choose your LSA’s eligible expenses, for example, professional development, meals, wellness, or family and childcare. 
2. We’ll code your unique benefits policy template into the Benepass platform and issue Visa cards. 
3. We’ll connect to your payroll to automate employee enrollment. 
4. You’ll communicate your benefits offering to your employees and invite them to join our Benepass platform. 

Ready to set up a versatile lifestyle spending account that everyone in your company will enjoy? Book a free Benepass demo today.