The Definitive Guide to Health & Wellness Stipends

From gym memberships to meditation apps, running sneakers and more -- health and wellness stipends are the perfect wellness benefit that solves for the unique needs of every employee.

Over the past few years, there's been a lot of new information coming out about the many benefits of health and wellness stipends for employees. 

As more companies turn to this option to better solve for the uniqueness of their team, more questions arise. 

That's why we developed the definitive guide to everything you need to know about health and wellness stipends:

Here's what is covered in this guide:

  1. What is a health & wellness stipend
  2. Examples of health & wellness stipends
  3. Benefits of health & wellness stipends
  4. How to create one for your organization

What is a Health & Wellness Stipend?

First, a definition:

A health & wellness stipend is a sum of money given to employees for them to purchase on health and wellness initiatives that relevant to them and their needs. 

Further details on what they are:

  • They are taxable items. Taxes can be grossed up by the employer or employees can cover the taxes.
  • Stipends can be given out on a monthly, quarterly, semi-annual, or annual basis. 

What they are not:

  • Health Savings Account (HSA)
  • Flexible Spending Accounts (FSA)
  • A health insurance stipend
  • A stipend that is reimbursed, as these are taxable purchases

Examples of Health & Wellness Stipends

Based on research, conversations, and market trends — the companies that are most innovative, focused on employees’ needs, driven to help the employees succeed at work and in life — are the most successful. 

Companies offering health & wellness stipend:

Example Health & Wellness Stipend

To the left is an actual health and wellness stipend from a customer of Compt's, Webflow.

Webflow gives their team members $200/month to spend on health and wellness items from gym memberships to workout gear to meditation apps.

After analyzing their team's stipend use, they saw employees were selecting many different types of health perks. 36 unique health and wellness-related perks to be exact, and over 22 different gym memberships!

How could an HR or People Operations professional create a program that supports this diversity of need? 

This is the power of a perk stipend or lifestyle spending accounts.

Benefits of Health & Wellness Stipends

Many companies from are turning to stipends to solve for their employees in more meaningful ways. 

Benefits of stipends include:

Employees are healthier and happier when stipends are offered.

People can choose what being “healthy” means to them and how to best achieve it. Where some people may love hiking outdoors, others may prefer to do group fitness classes. How people get healthy might change over time as well as preferences or their lives change.

Companies save money, and get more value out of the money they do spend.

When employers pick perks for employees, employees aren’t has likely to use them since it’s probably not what they’d pick for themselves. When employees pick their own perks, only the money used gets spent, and companies don’t waste money on wasted or underutilized perks.

If using software, stipends are easy to manage.

Since HR isn’t picking, piloting, managing, and communicating the many different health and wellness vendors, and it’s in the hands of the employees to get what they want — the process can take as little as 30 minutes a month to manage. If using a software like Compt, companies can ensure their investment in employees is 100% tax compliant.

While companies don’t need to offer their employees perk stipends, we've found the most successful companies are doing this today. These are the companies who are attracting talent and retaining their team because it’s not about what the stipend is, but rather what it represents. Stipends represent that an organization trusts employees and wants to support them and their individual needs. 

Read other resources on the growing popularity and significance of perk stipends:

99% of employees who feel they have higher well-being and organizational support recommend their company as a great place to work


Well-Being and Engagement Report 

Quantum Workplace & Limeade, 2015 & 2016

91% of employees with high well-being and organizational support are less likely to leave


Well-Being and Engagement Report

Quantum Workplace & Limeade, 2015 & 2016

38% of employees are more engaged when they feel their employer cares about their well-being


Well-Being and Engagement Report

Quantum Workplace & Limeade, 2015 & 2016

How to Create a Health & Wellness Stipend for Your Company

Creating a stipend is an excellent way to offer perks. Not only are they easier to set up but they’re also easier to maintain as the time it takes to manage them is much less.

Four steps to setting up a stipend:

1. Gather your budget.

Maybe you have an overall budget or a budget per person, but having a budget is a necessary step because that is what you’ll be passing on to your team. 

2. Determine spending timeframes.

Do you want to offer this monthly so you can ensure a monthly engagement, or do you prefer to offer it on a quarterly, semi-annual, or annual basis? It’s ultimately up to you and up above in the company examples section

3. Upload these program details into Compt’s perk management software.

You can also select what date you’d like your perk stipend to begin.

Not a customer yet? Schedule your demo today.

4. Lastly, invite your employees to the platform.

Once they receive an invite and activate their account, they can begin spending based on the start date of your program.

Learn more about the benefits of perk stipends

Download the free ebook to find out why perk stipends (also known as lifestyle spending accounts) have become the most common new perk.

Other Popular Types of Stipends:

There are more stipends than just a health and wellness stipend. Do a Google search for “top perks” and tucked inside almost every single list in plain sight are a surprising number of perk stipends.

So what are the other types of stipends or allowances? Below is a list of the most common:

Ready to See How Compt Can Help?

Let's connect to see how a wellness stipend would work at your company, and how it can help your company achieve even greater success.