What is a Work From Home Stipend and What Can You Spend it On?

Author: Tyler Cox


One of the most lasting effects of the COVID-19 pandemic is the trend towards remote work. Although many companies moved to remote work in early 2020 for the safety of their employees, both workers and businesses alike are realizing that there are significant advantages to allowing staff to continue working from home, at least for part of the week.


A recent study by Global Workplace Analytics, for example, found out that 82% of U.S. employees would like to work remotely at least once a week when the pandemic is over. Workers could save as much as $6,000 per year by working from home due to reduced costs for travel, parking, and food, the report estimated, and businesses could save as much as $11,000 per half-time telecommuter per year thanks to increased productivity, lower real estate costs, reduced absenteeism, and lower turnover.


But not every employee has the right equipment for remote working. For staff to be productive when working from home, their home office setup needs to include computers, videoconferencing tools, and high-speed Internet. That’s why many companies are providing employees with a remote work stipend that helps cover the cost of equipment needed for a home office. Recent surveys indicate that 1 in 5 companies are helping to pay for their employees’ home-office equipment, with a third reimbursing workers for their laptops and 10% covering Internet bills for remote staff.


If your company plans to offer a work-from-home stipend, an Internet stipend, or a work-from-home reimbursement policy, here are a few things to consider:


How is it managed?

Will you reimburse workers for purchasing specific equipment or purchase equipment for them? Will you offer an ongoing stipend, or will it be a one-time reimbursement? Those choices may determine both how complicated the program will be and how much it will cost, as well as if and how those stipends are taxed. If you pay workers’ Internet bills while they’re in your employ or purchase equipment that workers are required to return if they leave the company, they likely won’t have to pay taxes on those benefits. On the other hand, if they keep the equipment, they will generally have to pay taxes on its value. Seek the advice of a tax attorney.


What types of things can be purchased under an employee stipend policy?

That again will determine if and how those stipends will be taxed. Some companies are allowing workers to use stipends for taxable perks such as day-care subsidies and meals as well as gym membership and other health and wellness initiatives. Others are limiting acceptable purchases to items specifically related to their jobs. When it comes to equipment, it may be advisable to draw up a list of recommended models. That way, you can help ensure workers don’t purchase equipment that’s not right for the task.


Where must items be purchased?

If workers are buying their own equipment, you might consider specifying where they should purchase those items. You also might look into setting up an account with a specific vendor. Doing so may enable you to find the best prices on the things your workers need and possibly even negotiate volume discounts.


There’s no doubt that remote work is here to stay. Allowing staff to work remotely if and when they can offers the potential for significant benefits, including lower operating costs, improved morale, and lower turnover.


No matter how you decide to implement a remote work stipend, Yamaha Unified Communications is ready to assist with equipment to outfit any home office. Click here to learn more!