The old way: convoluted and inefficient
What were you doing before you connected with Compt?
Marc: We offered similar benefits, and it was $100 a month for cell phone and $100 gym reimbursement. The process was done through our regular expense reimbursement process, through Expensify, which was not ideal from a tax perspective. The cell phone reimbursement does not require a tax adjustment, but the health and wellness piece does. It was difficult and time-consuming to manage the tax adjustments as we had to create a manual process. The ability that Compt provides to integrate perk-related reimbursements through payroll and tax adjust the gym benefit, but not the cell phone benefit, was huge and has been a huge help for us.
What were your frustrations?
Marc: The biggest one was tax compliance for these perks. Before Compt, the process was manual and time-consuming, and we didn’t have a good tool to gross up employee gym reimbursements since these benefits are not tax-free.
In general, taking this process out of “expense reimbursement world” and into “corporate perk world” is what resonated with me. A lot of companies offer these perks, and often they don’t really shine a light on them so people see them as a perks, alongside other benefits like health and retirement. It’s not the same as being reimbursed for a work trip to NYC, which is where they would be found in the prior Expensify-led process.
Switching to Compt
What piqued your interest?
Marc: It was a product that was designed specifically to solve this IRS tax compliance problem. There is no shortage of expense reimbursement platforms out there; these tools are a dime a dozen. However, there wasn’t a tool that specifically said, “Corporate perks aren’t as simple as reimbursing employees; there’s more to think about.”
The real difference is that your team built a workflow that integrates with payroll. Other expense software products are designed to touch the employees’ bank accounts directly, your workflow is designed to interact with our payroll system. That was a workflow that doesn’t exist with any other expense platforms. As a result, these perks are processed alongside other employee benefits, such as health insurance and retirement contributions, which is where they belong.
What results did you achieve from working with us and how would you describe the transformation?
Marc: There are two things. First and foremost, Compt allowed us to address the tax complexity problem in an automated way.
Second, as we worked to implement Compt, we came to an important realization; since this perk isn’t recognized by the IRS as a tax free fringe benefit, it doesn’t need to be just limited to a gym membership. As a result, we can think about health and wellness more broadly and essentially unlock what health and wellness means to each individual on the team. This manifested itself in a lively discussion in our company Slack channel, with employees asking if they reimburse running sneakers and ski lift passes. Somebody even asked if he could use the perk to take fencing lessons. When we said yes to all including the fencing lessons, he signed up and then shared a picture of him in his fencing outfit. That ended up leading to a really neat conversation within our company. It unlocked a greater conversation around health and wellness, and it’s been really nice to see unfold.
More perks, better culture, & effortlessly IRS compliant
You’ve been using Compt for nearly two years, what are your thoughts?
Marc: It’s nice to not limit people into a box like a sports club membership. Having a benefit like this that says, “We care about your health and wellness and will empower you to choose those wellness activities to spend this benefit on,” is a big factor in making employees happy. A lot of people have been able to benefit from our Compt perk program through its openness and flexibility.
You can see the excitement in our company Slack channel. The fencing moment I mentioned above was a really cool culture moment. I’m not a gym-goer myself and therefore hadn’t been able to advantage of what our company offered. When we signed up for Compt, however, and I was able to apply the benefit toward activities that are meaningful for me, I signed up to run my first ever half marathon.
How likely are you to recommend Compt to others?
Marc: Very likely. I know other CFOs feel this pain point, and Compt is definitely solving a need.
Why should someone listening take action right now?
Marc: In Boston, we’re competing with companies like Facebook and Amazon for talent and we know benefits move the needle. The fact that we can shine a light on benefits such as these and make them broader, puts us in a much better position when it comes to competing for talent.
Benefits like health insurance and dental are table stakes at this point. Perks such as those that can be offered with Compt can really enhance the overall benefits package. And in our case, the ability to support the health and wellness of our employees really enhanced our culture and allowed our company to make a powerful statement about how much we care for the wellbeing of the members of our team.