The Ultimate Guide to Perk Stipends

Everything you need to know about your employees' favorite perk. 


As the old way of offering perks becomes less valuable for employees, and more administrative-heavy for HR, companies are leaning on perk stipends to solve both problems while further delighting their people.

That's why we developed this guide with everything you need to know about this fringe benefit: perk stipends.

Here's what is covered in this guide:

  1. What is a perk stipend
  2. Examples of perk stipends
  3. Popular types of stipends
  4. Benefits of perk stipends
  5. Best times & situations to offer them
  6. How to set up a perk stipend
  7. What people spend their stipends on

What is a perk stipend?

First a definition:

A perk stipend, is a sum of money given to employees dedicated to perks.

Instead of guessing what perks their employees want, perk stipends help employers put the money and choice in the hands of employees so they can get the perks they need most.

They're also referred to as:

  • perk allowances
  • lifestyle spending accounts
  • specialty accounts

They are becoming increasingly popular in today’s work climate because they dramatically improve both the process of offering perks for HR team members and more importantly, the experience for employees. 

sam's sample perk stipend

Example of a perk stipend

In the example to the left, Sam's company has allocated $100 per month to her and other employees to spend on the following perk categories: continuous learning, health & wellness, and food.

This month, Sam purchased books, a gym membership, paid for a lunch with her team, and still has $20 remaining.

How would you spend $100 this month?

Leading Organizations Using Perk Stipends Today 

We're living in the age of personalization. Everything in our daily lives, from our Netflix subscriptions to Spotify playlists to iPhones is customized to us and our preferences. 

Perk stipends, or lifestyle spending accounts, are the best methods for companies looking to introduce more personalization without adding complexity.

Here's a short list of companies using perk stipends:

Want to see more examples? Check out 63 Real-World Examples of Perk Stipends at Leading Organizations.

Usage per platform for Continuous learning perk


Buffer's $20/month Continuous Learning stipend

As mentioned above, Buffer offers their employees a $20/month continuous learning perk stipend.

After analyzing their employee's usage of the perk stipend, they noticed that their people were using many different platforms to learn.

15 unique platforms to be exact.

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

This is the power of a perk stipend.

Common Types of Perk Stipends

Depending on how you set up your stipend, you can create multiple or one large one.

Below are some of the more popular stipends we see at ComptL

ultimate guide to lifestyle spending accounts

Learn more about the benefits of Lifestyle Spending Accounts

Don’t have time to go through this comprehensive guide right now? Want to read this content later and take advantage of some additional information about perk stipends while you’re at it?

The Benefits of Offering Perk Stipends

This new approach to employee perks has been gaining a lot of media attention lately because it solves so many common problems of traditional perk programs, and it also addresses the trends that are shaping the future of work.

So what exactly are the benefits for companies and employees?

1. Flexible for Employer & Employees

Lifestyle Spending Accounts make sure employees get the perks they want and need most.

Pet insurance, in-office yoga, and financial planning services are excellent perks, but often only a small percentage of a team will use them. Lifestyle Spending Accounts create a 100% personalized perk experience, and since employees get more control over how they use it, they're more likely to engage. 

Solve for all employees, not just ones located in local HQ. 

In-office and remote employees alike love LSA's.

perk allowance

2) Easy-to-Manage


HR is no longer is forced into trying to pick the "perfect perk" with their limited budget available.

Decrease the administrative burden on HR 

Less time-consuming and labor intensive tasks, and more automation.

Always IRS compliant

Finally, your CFO will be able to sleep comfortably at night knowing your perks are appropriately taxed. And, they have you to thank for that.

3) Strategic & Holistic

Make the most of every company dollar spent on perks. 

With Lifestyle Spending Accounts, companies no longer experience expired food, wasted event tickets, or under-attended in-office fitness sessions.

Encourage a more equal distribution of perks and who they solve for. 

Happy hour might sound like a great idea, but what percentage of your team actually likes drinks, or have time or desire to attend the event? Avoid usage for the sake of usage, start saving money and resources by offering more inclusive perks.

Better align with company mission, vision, values, and goals. 

Gain a competitive edge by approaching perks strategically and aligning them with what matters to the business.

Want to see more benefits? Click here to learn more.

[Actively comparing various perk vendors? Check out our guide, Comparing Perk Software: Everything You Need to Know]

When Do Companies Switch to Perk Stipends?

Whether you're creating a perk program from scratch or looking to make updates to an existing one, adding personalization to your perks program can achieve many of the same goals that traditional perk programs do, while giving you (and the rest of your organization) more benefits.

Companies usually begin looking to perk stipends when they want to:

  1.  Offer perks, but lack the money and time to manage a perks program
  2.  Increase engagement rates with perks
  3.  Update perks to be inclusive of everyone, not just a few
  4.  Support a distributed workforce
  5.  Decrease the administrative burden with managing perks
  6.  Become IRS compliant

Perk Stipends in the News From 2020

Tucked inside every article about top perks you'll find a bunch of perk allowances or stipends. From AirBnB's $2,000 a year travel stipend to Facebook's $5,000 baby bonus. 

Below are some recent examples of perk stipends in the news, highlighting their traction:

The 5 Steps to Setting Up a Perk Stipend or Lifestyle Spending Account:

Setting up a traditional perk program from scratch takes seven steps and constant tweaking to get it right. Lifestyle Spending accounts aren't too far off, but the process is much easier and in the end, employees are much happier.

Follow these 5 steps to set up a perk stipend program:

1) Identify your current number of employees and your total budget for employee lifestyle benefit accounts.

2) Determine how much you'd like to spend per employee per timeframe. 

Timeframes could be monthly, quarterly, semi-annually, annually, or a one-time basis.

3) Select categories for employees to spend in. 

These could align with company mission, values, goals, or be 100% open to give employees complete freedom over their perks. Some popular categories include: health & wellness, continuous learning, family, food, and travel. Some of of Compt’s perk stipends (categories in which employees can spend their perk money in) are the following:

4) Set up your program. 

If you use a perk management software like Compt, this could take 15 minutes. If you're doing it manually - develop a spreadsheet/form where you can manually track the individual perk expenses, total amounts remaining within each time-frame, collect receipts, account for taxes, data for finance, and status of each perk expense.

5) Last, but not least, communicate it to the team. 

Draft up an email, or better yet, a page on your internal wiki to communicate the new perks plan. Remember to explain the why, what, when, and how details. Lastly, supercharge your communication plan by creating a forum for people to provide feedback, whether it's a form for them to complete or holding a series of office-hours.

[Learn about how Compt is helping companies go from one-size-fits-all perks to individualized and meaningful ones (in less time than it takes to eat lunch).]

See How Compt's Perk Stipends Stack Up

The software available to manage perks has grown over the last two years. Whether it's selecting vendor aggregators, debit card programs, or Compt -- our goal is to help you select the best perks program for your situation.

What People Buy With Their lifestyle spending Account:

Curious what people actually spend their perk stipends on? We've pulled together some actual purchases from Compt users.

Remote Work Stipend:

  • High-speed wifi
  • Desks, monitors, keyboards (and other items also purchasable through a one-time equipment stipend)
  • Groceries, delivery, and healthy food kits
  • Coffee, teas, specialty sodas, and other beverages 

Continuous Learning

Health & Wellness:

  • Gym memberships
  • Yoga classes
  • Classpass
  • Fitbit wearable
  • Aaptiv app
  • Calm app 
  • Massages
  • Acupuncture


Want a more comprehensive list? Check out our ideas for perk spending which also includes suggestions from the various other categories.

Ready to see how a perk stipend would work at your company?

We've got you covered. We're here to talk through your company's current goals and challenges with perks, and see if perk stipends can help you achieve greater success.