If you have remote employees, a work from home stipend can ensure they’re properly equipped to do their jobs. In some countries, providing financial support for remote work expenses isn’t just a perk — it’s a legal requirement.
In this article, we’ll look at some of the ways you can encourage your team members to use their work from home stipends, and provide some tips and best practices for ensuring your stipends provide value.
So, let’s jump straight in.
What is a work from home stipend? What employers need to know
Work from home stipends — also known as remote work stipends — are financial allowances provided to remote employees to help cover the costs of setting up and maintaining a home office. Depending on local labor laws, these stipends may be optional benefits or mandatory employer obligations.
According to a recent Forbes Advisor survey, home office stipends are the third-most desired benefit for remote workers.
Are work from home stipends mandatory?
Whether work from home stipends are mandatory depends on the country where the employee is based. In some countries, employers are legally required to reimburse employees for reasonable work-related expenses, including costs associated with working from home. This can include internet access, equipment, utilities, or other necessary tools. In other countries, work from home stipends are not legally required and are offered at the employer’s discretion as a benefit to support remote workers. Because labor and reimbursement laws vary by jurisdiction, global employers should review local requirements before setting stipend policies.
Are work from home stipends taxable?
This depends on local tax laws. In many countries, work from home stipends are treated as taxable income, although certain reimbursements may be tax-exempt if they meet specific criteria.
What do work from home stipends cover?
Covered expenses should be clearly defined in your remote work or expense reimbursement policy. You should specify in your stipend policy what exactly your employees can use it for. Generally, they aim to cover the following:
Office furniture
Most work from home stipends are primarily intended for ergonomic office furniture. This equipment is fundamental to preventing strain and injury over long periods, and ensures that your team members are comfortable in their working environment.
Some examples of ergonomic furniture that could be covered by a stipend include:
Ergonomic chairs
Desks
Monitor stands
Lighting solutions, like desk lamps
Storage solutions, like drawer units or shelves
Technology and equipment
Most companies provide laptops and relevant peripherals (such as a keyboard and mouse) as standard, meaning they’re not included as part of the employee’s stipend. However, there may be additional supplementary equipment or hardware that the employee needs to be productive, such as:
Monitors (or extra monitors)
Graphic tablets
High-quality webcams
Noise-canceling headphones
Microphones
Software and subscriptions
Again, if your employees require software or subscriptions to do their job, these should be provided as standard — not as part of the stipend. However, your employees may require additional software or subscriptions to make their lives easier or to boost their productivity, such as:
Wellness apps
Organizational tools
Role-specific support tools
Internet and communication expenses
A robust WiFi connection is crucial for home-based remote workers. Therefore, some companies are happy to cover all (or part) of their employees’ internet and communication expenses, including:
Internet plan upgrades
WiFi coverage enhancement (e.g., WiFi extenders or mesh network systems)
Work-related mobile data and calls packages
A dedicated phone line
Utilities
Working from home also means an increase in household utility bills, which can be covered in part by a stipend. These might include electricity bills and internet bills, as well as an allowance for groceries or food deliveries.
Advantages of work from home stipends
Work from home stipends benefit both employees and employers. Stipend amounts and structures vary widely depending on company size, location, and legal requirements.
Some of the benefits include:
Enhanced employee productivity
By providing ergonomic furniture and the latest tech equipment, companies ensure that their remote team members have a work environment that’s conducive to productivity.
Ability to attract and retain talent
According to a recent survey by FlexJobs, 96% of working professionals stated that the ability to work from home at least part of the time would best support their mental health. Offering a work from home stipend on top of that is a great way to make these individuals even more satisfied — and more likely to stay with your company.
Cost savings for employees
Stipends reduce the financial burden of setting up and maintaining a home office, meaning your employees will be less stressed and more productive.
Disadvantages of work from home stipends
There are, of course, some disadvantages of working from home stipends such as:
Financial burden on employers
You might have to reallocate funds from other areas to pay these stipends, depending on how large they are. This could potentially put a strain on your financial resources. However, it’s worth remembering that you would have needed to pay equipment costs, energy bills, and other outgoings if your remote employees were working on-site.
Potential inequality among employees
Stipends can create disparities among employees. For instance, those who work in areas with a higher cost of living might find the stipend insufficient compared to colleagues in regions with lower everyday expenses. Unless managed fairly, this discrepancy can lead to feelings of inequality and dissatisfaction, negatively impacting employee morale.
Additional administrative work
Implementing stipends involves setting clear policies, determining eligibility, and managing ongoing payments. This process can be complex and time-consuming.
There is also always the risk that the stipends will be abused. Ensuring that they are used as intended requires receipt monitoring, which can add to the administrative load.
Fortunately, you can easily mitigate this work by using a global HR platform, like Remote. Our platform allows you and your people to easily manage expenses.
Examples of work from home stipends
At Remote, we offer all our people a generous work from home stipend — and we’re not the only ones. Some other examples of companies that offer such stipends include:
Basecamp. Basecamp’s parent company, 37signals, provides up to $3,000 for desks, desk chairs, computer accessories, and other office furniture during the employee’s first year with the organization.
Buffer. Buffer offers a home office allowance of $500 per employee, as well as $200 per year for tech accessories and an additional $200 per month for “coffee shop working.” It also offers an internet reimbursement scheme.
Webflow. Webflow provides a monthly $380 stipend to each of its remote employees for their home office needs.
HubSpot. HubSpot provides a $1,000 stipend for its remote employees.
Best practices for work from home stipends
To ensure that your work from home stipend program is effective and successful, consider the following tips:
Clarify your team’s needs
As with any benefit, your stipend is a waste of money if nobody finds it useful. Therefore, it’s essential to understand the needs of your workforce and tailor the stipend according to those needs.
To find out what your employees need:
Conduct surveys. Ask your workers to answer surveys to gain insights on how to improve their home office setup. Make sure that the questionnaire covers various home office aspects, such as furniture, technology, and other work-related tools.
Set up one-on-one meetings. If you want a more detailed understanding of your workforce’s needs, set up one-on-one meetings with individual team members. Doing so can help you better understand these workers’ unique requirements.
Analyze specific remote job roles. Revisit the specific tasks assigned to each remote role and double-check that these employees have the resources and tools they need to deliver optimal performance.
Define your policies clearly
Develop clear guidelines on what the stipend covers and clearly outline the process for receiving the stipend. For global teams, policies should also account for country-specific reimbursement and labor law requirements.
There are several ways you can offer your remote work stipend:
As a one-time stipend (a lump sum for newly hired employees to set up their home office)
As a regular stipend (monthly, quarterly, semi-annual, or annual allowances for purchasing necessary items)
As reimbursements (monthly or annual reimbursements of exact costs)
Set a realistic budget
Budgeting for a stipend program is a balancing act between supporting your workers’ needs and maintaining your company’s financial health.
Review your company's current financial situation and evaluate how much you can realistically allocate to the stipend program without compromising other critical areas of the business.
Monitor and adjust
After implementing your stipend program, monitor its effectiveness.
Gather feedback from employees regularly to gain insights into what’s working and what’s not. Be prepared to make adjustments as necessary, depending on changes in the cost of living and your company’s financial performance.
Manage your work from home with Remote
Work from home stipends are not just a form of financial aid. They represent your company’s investment in its employees’ comfort, productivity, and overall job satisfaction.
If you’re thinking of offering this benefit to your global workers, Remote can help you develop and implement an attractive package while staying legally compliant in all regions. We can also simplify the administrative process, making it quick and simple to manage your people’s expenses.
To find out how exactly we can help your business, talk to one of our friendly experts today.
