Cell Phone Stipends: Everything You Need to Know

A cell phone stipend is a sum of money given to employees to cover a portion of the payments on cell phone purchases or plans.

Updated September 12th, 2023 by Sarah Bedrick

 
 

Mobile phone stipends have become increasingly common over the as organizations began adopting "Bring Your Own Device (BYOD)" policies. 

The 2022 Maximizing Mobile Value by Samsung report found that the vast majority (98%) of BYOD providers pay a monthly stipend to employees to compensate them for the use of their personal mobile device. 

Since a large percentage of organizations offer this type of benefit, we developed this guide to detail everything you need to know about cell phone reimbursement stipends (also known as cell phone allowances or a mobile phone reimbursement).

Here's what is covered in this guide:

  1. What is a cell phone stipend?
  2. Benefits of cell phone stipends
  3. Examples of cell phone stipends
  4. Cell phone stipends vs. work perk stipends
  5. Decide between COPE & BYOD
  6. Typical amounts for cell phone stipends
  7. How to create one for your organization
 
 

What is a cell phone stipend?

First, a definition:

A cell phone stipend is a sum of money given to employees to cover a portion of the payments on cell phone purchases or plans.

Further details on what they are:

  • They're also referred to as cell phone reimbursement stipends, cell phone allowances, or a mobile phone reimbursement.
  • Stipends are often given out monthly.
  • To answer the question "are cell phone allowances taxable?" - no, it is a non-taxable benefit.

 
 

Benefits of Cell Phone Stipends

Covering your team's cell phone bill is an especially good idea when team members use their personal cell phones:

  • to make work calls
  • to check and respond to email
  • to posts updates in work-specific accounts and apps (like ClickUp, Trello, or Smartsheet)
  • be accessible via Slack, MS teams, or whatever internal chat system you use
  • to test functionality on mobile devices

If your team members are expected to work long hours, be accessible during off hours, or use their cell phone for work, covering their cell phone is an excellent work benefit.

A few of the benefits:

  • This is a nontaxable benefit you can offer your employees
  • When done through an expense software like Concur or a perk management software like Compt, they are scalable benefits, and also 100% IRS compliant.

Setting up an IRS compliant cell phone reimbursement stipend also helps add the needed clarity around what your company covers and how, which makes it all that more likely for your employees to be more mindful about their work-related cell phone usage and expenditure.


 
 

11 Examples of Cell Phone Stipend Programs

When setting up a cell phone program, there are two approaches. You can set up a stipend to reimburse your team for cell phone plans, or as we talked about above, you can create a broader program that includes cell phones as well as other categories related to work.

Below are examples highlighting the two unique approaches.

1. Microsoft

They provide their employees monthly reimbursement of $75.

2. Google

They provide a cell phone stipend of $70 per month.

3. Dropbox

  • $100 a month for cell phone
  • Perks allowance which "empowers employees to customize their benefits in line with what really matters to them."

4. Tesla

Offers their people $50 a month cell phone stipend, along with discounts on dining, travel, and fitness resources.

5. Stripe

Stripe offers its people $50 a month stipend toward their cell phone service.

6. Okta

Okta reimburses full-time employees up to $200 per month for their personal cell phone and internet service.

7. Buffer, a fully-remote company.

Buffer offers several perk stipends:

  • $200/month for "Working Smarter" stipend for coffee shop working purchases
  • $500/teammate for home office set-up
  • $200/year for tech/office needs
  • Internet reimbursement stipend
  • $850/year continuous learning stipend

To learn more about Buffer's stipend programs, check out this in-depth post.

8. Lyft

Lyft offers its staff $60/month ($720 a year) cell phone reimbursement.

9. Circle

Circle offers its employees a $150/month monthly stipend to use on their cell phones.

10. NerdWallet 

Offers everyone a WFH stipend to deck out our remote Nerds' home offices and a wellness stipend for personal wellness.

11. Strava 

The Strava workforce is eligible for a $1,000 annual gear stipend but must claim reimbursements for mobile phone expenses and gym memberships.

There are more examples of companies doing this successfully. If you want to talk through what our most successful customers are doing, we’re happy to help. Click here to talk with a cell phone stipend expert.

 
 
cell phone reimbursement stipend
 

Ready to set up a cell phone stipend?

Learn how managing a cell phone stipend through Compt makes life easier for you and for your employees.

 
 

"Cell Phone Reimbursement Stipend" vs. "a "Work-Support Perk Stipend"

When most people think about covering their team member's work-related expenses, many stop at cell phones.

However, in today's world people are not only using their cell phones for work but they're often spending personal money on work-related expenses such as noise-canceling headphones, ergonomic mouses, monitors, wifi/internet bills (especially for those who are remote), software, and more equipment

Many of today's culture-forward companies are going beyond the traditional cell phone reimbursement model and are considering other ways they can support their employees at work through a work equipment stipend or a remote work stipend.

The major benefit of using the equipment model is that you're able to cover the same amount of money for your employees but give them more options and control over what they spend that stipend on. They're given the choice of covering their cell phone, in addition to any other work-preference-related personal expenses.

Below is a graphic showcasing two different stipend programs you can develop with a $100/month investment in your staff.

cell phone reimbursement stipend options

Throughout this guide, we'll be discussing both types of stipends.

 
 

How to Decide Between BYOD and COPE

First, what do these acronyms stand for?

  • COPE = 'Corporate-Owned, Personally Enabled."
  • BYOD = 'Bring Your Own Device'

If you're planning to buy the cell phones, the plans, and distribute them to your team, that's COPE. BYOD is your go-to plan if you're reimbursing all, or some, of your employees' cell phone plan.

To decide between the two, you have to determine what matters most to your company.

If security is a big concern or being able to track the location of your employees -- then COPE is likely the right path for you. Be careful though because it's important to realize that with the COPE approach, you're going to manage the cell phone devices, plans, bills and everything else that comes with owning a cell phone (or hundreds of them) which can take a lot of work. 

As the Abacus blog points out, "BYOD is a more scalable, affordable, employee-oriented policy than COPE." Plus, most people don't want to carry around two phones, scoring another point for BYOD and its practicality. 

Read more:

 
 
 

Office pizza parties and branded thermo mugs just aren't cutting it anymore

 
 

Options for Cell Phone Stipends or Lifestyle Benefit Allowances:

Process options:

For the longest time a simple reimbursement model was the only option available, but that's not true anymore. As the benefits/perks market has evolved, so has the options available for employers.

Below are some options you have for offering your employees a cell phone reimbursement stipend:

  • Give employees a specific amount every month, reimburse through an expense software such as Concur or Compt.
  • Give employees a 'Cell Phone Stipend,' reimbursed through an IRS-friendly perk software (again, like Compt). This is different from the option above because it highlights the cell phone stipend as a benefit, not as a business expense.
  • Give employees a "Work Equipment Stipend", a "Productivity & Tech Perk Stipend" or a "Remote Work Stipend" where employees can have their cell phones reimbursed as well as hardware like mouses or monitors, software, and anything else that helps them be more successful at their job. If you choose this option, this type of stipend could be comprised of some taxable and nontaxable items, making IRS tax compliance even more important.

Software options:

If you're looking to offer these as a business expense, choose a business expense software like Concur, Expensify, or Compt.

However, if these are part of a more holistic perk and lifestyle benefit program, then a stipend and expense software like Compt is best.

 
 

Typical Amounts for Cell Phone Stipends

Research conducted by Samsung and Oxford Economics reveals that 98% of BYOD companies offer an average mobile stipend of $40.20 per month, or $482 per year per employee, to go toward the cost of their cell phone plan or purchasing of a new one.

However, data from the 2024 Lifestyle Benefits Benchmarking Report reveals cell phone was the 6th most popular claim category by amount spent.

 
 

How to Set Up a Cell Phone stipend:

1. First determine how much you want to offer your team members, within what timeframe.

Most companies offer cell phone stipends on a monthly basis, but you can do quarterly or annual -- whatever is best for your situation and team. Then determine how much.

According to Abacus' How to Create a Cell Phone Reimbursement Policy, they suggest "$50 for low business use and $75 for high business use." 

Also, here's a handy calculator to help you identify how much you should be spending on mobile stipends.

 2. Secondly, select your perk spending categories.

Next decide, if you're doing a cell phone reimbursement spending option only, or if you're creating a larger, more comprehensive program around all-work-related expenses. The latter is considered more akin to a perk program and would include items like hardware, home internet bills (especially great for those who are remote), software, and anything else that helps them to enhance their work abilities and experience.

3. Once you have this information determined, now it’s time to decide how you’ll manage the process.

Your options include:

Managing the process manually

If you choose this option, be prepared to set up a process to track purchases, receipts, balances, approval and paid perks, as well as rejections or ones which need further review.

Consider using Google forms to track submissions, excel or Google sheets to track progress, and be sure to create a process to track the nontaxable vs taxable (for IRS compliance).

Or choose software to help you manage it

Concur and Expensify are two of the most well-known choices for business reimbursements.

However, if you decide however to extend the program to be more than just a cell-phone reimbursement program and include all types of work-related perks, a perk management software like Compt is best.

Compt is 100% IRS compliant, can manage your other perk stipends, and streamlines the entire process which makes you and your finance team's job easier. Plus, with Compt you don't have to pay each expense report like expense software, but rather pay a monthly amount based on the number of team members which can lead to a lower total price.

 
 

A lifestyle stipend makes it possible for companies to offer more lifestyle benefits, with less money and ensure that they are personalized to meet the needs of their people.

Below are some of the popular types of stipends:


Sarah Bedrick

Chief Marketing Officer

Prior to Compt, Sarah worked at HubSpot for 6+ years, where she helped to build, scale, and grow the HubSpot Academy division. She is obsessed with understanding what makes a company culture great, being a career and life coach to people in tech, and creating cherished memories with her husband and two young kids. Her favorite Compt stipend category is Health & Wellness.

 
 

See how Compt is helping companies like yours

Quotes from HR leaders about why they love using Compt for their stipends

 

Compt has been instrumental for us to be able to increase employee satisfaction and utilization rates far higher than we could have ever achieved with our old perks approach.

Melissa Salcius

Director of People Operations, Fictiv

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.'

marc volpe

Marc Volpe

CFO

It’s been a really easy and fun way to offer perks to our employees, which has added to the experience our employees are having. It’s low lift on the HR side which goes a long way with employees.

CHRO, Carrot

Leslie Neitzel

CHRO, Carrot

 
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