A Guide to Work From Home Stipends (Work Stipends in 2023)
A work from home stipend helps your employees work productively, wherever they are. Learn more about how to design one.
A work from home stipend helps your employees work productively, wherever they are. Learn more about how to design one.
Remember when working from home was reserved for freelancers and uber-trendy startups? Times have changed, and 98% of employees now overwhelmingly recommend work from home arrangements and plan to ditch attending the office (at least some of the time) for the rest of their careers.
Thankfully, organizations have learned that employees can be highly productive at home, so long as they have a computer, the internet, and asynchronous comms like email or Slack. But who should pay for these home office staples outside the official corporate environment? One option is to use a work from home stipend.
Work from home stipends are an upfront allowance that employers give employees for investing in a comfortable remote workspace. These WFH perks are generally considered taxable income when spent. Many companies have built programs that help employees perform their jobs productively from home and that act as a great tool for attracting and retaining talent.
This guide covers what you can include in your stipend, the advantages of offering one, and how to design a benefits package that works for your distributed team.
Remote work stipends may cover a wide variety of home office expenses but primarily focus on enabling employees to set up a functional and productive workspace. Buffer’s State of Remote Work 2023 report shares some interesting insights into where today’s remote workers dial in from. Only 37% have a dedicated office space, with 21% using a bedroom, 20% working in their living room, and 14% roaming around from room to room.
Auridas Franckevičius, a Blockchain Developer at Syntropy, shares how fluid his workspace is:
“I’ve been working remotely for three years now and don’t get how some people need ‘discipline’ to split environments. I work at a kitchen/dining table, and when my laptop is open and in non-sleep mode, that’s my ‘work’ environment. When I finish work, I close it and push the ‘work’ environment to the other side of the table. It stays closed until the next morning.”
Whatever your employees’ preferences, a robust WFH stipend should include everything your employees need to complete their workload comfortably and without distraction. Some category options include:
An ergonomic office setup reduces the risk of employees developing muscle fatigue or musculoskeletal disorders such as tendonitis or carpal tunnel syndrome. Your stipend can cover the cost of quality office furniture such as a desk, office chair, and footstool that support your employees’ posture and increases their productivity. Heather Leo, Account Executive at Chili Piper, elaborates:
“A comfortable and ergonomic workspace is important for physical and mental well-being. Invest in quality office equipment and create a designated workspace free from distractions.”
Buffer research reveals that only 40% of remote workers receive an office desk and chair paid for by their employer. Another 38% are not reimbursed for these purchases but wish they were.
Lighting is essential in setting the tone for a productive workspace while providing a professional backdrop in video conferencing calls.
Natural daylight alleviates eye strain, fatigue, and headaches while reducing stress, anxiety, and sleep deprivation. If your employees’ homes don't offer ample light around their desk area, your stipend could cover lamps or task lighting to give them more control over their environment.
Most remote workers require a selection of hardware, including:
Buffer’s research says that 64% of remote workers pay for this type of hardware, but a further 25% pay for their own and aren’t reimbursed.
In-office employees can access a range of desktop and mobile tools, and this should be the same for remote employees. Your stipend should cover software subscriptions for the following solutions:
Your stipend may also cover news or professional membership subscriptions such as Forbes or Harvard Business Review as required.
A stable Wi-Fi connection is the backbone of a productive remote work setup. Your stipend can cover your employees’ monthly internet and cell phone bills if they use it for professional purposes such as business calls.
Surprisingly, according to Buffer, only 28% of companies pay for their employees’ home internet costs, and 44% of workers wish their employer would reimburse them. Stand out from competitors by incorporating internet and cell phone expenses into your stipend.
The cost of energy bills continues to dominate news headlines, and a study by Sky Connect found that 87% of remote workers worry about the cost of running their home office. Some distributed team members seek out coworking spaces and coffee shops to work in, where they can stay warm as they work. However, limited connectivity is an ongoing concern. To get around this, employers can offer a stipend that contributes toward the rising costs of utility bills.
Not sure what to include in your stipend? Check out how we partnered with Jamf to set up a Benepass Remote Work Account. The flexible program includes numerous eligible items to ensure working from home is friction-free for Jamf’s employees.
Some remote employees may enjoy an occasional day of working from a coworking space. You can allow employees to spend remote work stipends on day passes or monthly memberships to WeWork and other coworking spaces. This gives employees a needed change of scenery and helps reduce potential burnout associated with working from home.
Offering a work from home stipend sets you apart from other organizations and positions you as an employer that cares about its people. Here are the specific benefits your company and your employees can expect from doubling down on remote work.
85% of employees feel they have a better work-life balance, 81% are less stressed, and 79% experience better mental health in remote roles compared to office-based work. Robin Anna Hales, a Neurodivergent Neurodevelopment Practitioner, explains how working remotely is a game-changer.
“I work for one of the most flexible companies out there, and it means I can commit to optimizing my work and doing the best possible job for my clients while knowing I’m safe and can recharge when needed.”
Employees who can work from home at least some of the time are 86% happier than their in-office counterparts. Data from Owl Labs’ State of Remote Work report also confirms that 75% of workers feel more trusted by their boss. But how does this happiness and satisfaction translate into results for your business?
62% feel more productive when working remotely, and according to Buffer, 58% of remote workers are actively engaged in their work.
Attending a physical workplace comes at a cost. Owl Labs estimates that the average office worker spends $862 per month on attending work, mostly on the commute and expensive lunches. In comparison, remote workers spend only $431 per month. Hybrid workers who flip-flop between both worlds can expect to spend $19.11 daily working from home.
Of course, living costs vary significantly depending on location. Employees can further stretch their remote work stipend by living in the most affordable destinations for remote workers. These include Madeira, Portugal; Valparaiso, Chile; and Bucharest, Romania.
Actively supporting employees who want to work remotely with a stipend will significantly improve your employer brand. According to Owl Labs, existing employees will be 76% less likely to leave a remote role, but if an employer removed the option to work from home, two-thirds of workers would immediately start looking for a job that offered greater flexibility, and 39% would quit.
Plan out how best to support your remote team by following these steps to success.
Measure the success of your stipend by establishing SMART goals from the outset, which must be specific, measurable, achievable, realistic, and timely. Track your progress and make adjustments as necessary. For remote working, you might set goals such as:
Start by researching how much your competitor employers offer and the variety included in their remote work stipends. During the pandemic, companies like Google and Shopify offered stipends of $1,000 to cover costs associated with equipping each employee’s home office.
For more current data, our Benepass Benefits Benchmarking Guide can give you a headstart with the research. For example, our internal customer data reveals that the average home office stipend is $821, offered by 37% of organizations. This increases to an $860 stipend that 42% of tech companies provide.
Part of your budgeting should be to determine how to distribute your stipend. Your options include:
According to Benepass internal customer data, a one-time payment is the most popular way to distribute a work from home stipend.
Use employee surveys and check-ins with managers to ask your remote workers what they need to stay productive and connected. Some might value additional software, while others may favor better furniture or home office equipment.
Remember: Employee needs will evolve, so be prepared to update the scope of your stipend in line with their feedback.
Dishing out home office stipends is only the first step in supporting your remote employees. Ensure your employees understand how to select the appropriate equipment that will enable them to work productively while protecting their health.
Example: Provide resources on setting up an ergonomic workspace and explain the ideal posture your employees should adopt at their desks. Their feet should be flat on the floor, with their thighs parallel and their knees at 90 degrees. Their shoulders should be relaxed, and their elbows slightly bent at 90 degrees and close to the body.
Providing a work from home stipend is only beneficial if all staff know about your offering and have access to it.
Setting up a flexible lifestyle spending account puts your employees in control of how they spend their stipends and makes sure everyone is on an equal footing when accessing the program.
Example: An employee experiencing lower back pain might use their stipend to invest in an ergonomic desk chair or standing desk, while another who lives in a noisy neighborhood might prefer a pair of quality headphones.
The road to remote might include some bumps as your organization determines the best way to enable your distributed workforce. Consider the following points when designing your stipend strategy.
Ensure your employees understand that a remote working stipend is a taxable benefit, so there are no surprises. However, the amount that is taxed is location-dependent.
In the U.S., a remote work allowance is taxed in the same way as regular income. This changes if employees purchase a predetermined amount of home office equipment and employers reimburse the expense. Clear business expenses are non-taxable.
Trusting your employees to work effectively from home means you can’t monitor their office setup. Ensure your workforce understands the stipend and what they can use it for.
Another stumbling block could be worrying whether your employees are actually spending the money on home office supplies. Tracking employee expenses and determining eligibility can certainly be burdensome from an administrative perspective.
Pro tip: With Benepass, you’re able to designate eligible expenses so that employee transactions are automatically approved or declined depending on your company’s unique benefit policy. We also provide detailed spending reports so you can track how employees are spending their funds.
Decide who is eligible to receive a remote working allowance, for example:
If you have employees who mix remote and office work, consider including them in the stipend program. This will provide more flexibility for your staff and show them you trust them to work from home.
Without a bottomless budget, you’ll need to constantly evaluate whether you can justify the cost of a work from home stipend. To do so, constantly check your progress metrics against your goals.
Example: If your stipend goal is to increase employee retention rates, check how many employees have resigned since introducing your current stipend program, and compare it to before.
You might also check exit interviews, pulse surveys, and any productivity metrics you track to measure your return on investment.
If you’re not receiving the results you expect or can afford, consider adjusting your stipend by:
Work from home stipends are a no-brainer. Instead of paying employees to come into the office and cover running costs such as rent, energy bills, and coffee on tap, you can support your employees in performing their best from the comfort of their homes.
Follow these steps to get started with the Benepass Remote Work Account:
Ready to improve employee experience at your organization and give your team all the tools they need to be productive? Book a Benepass demo today or email email@example.com with any queries, and we’ll be happy to help.