The Ultimate Guide to Employee Perk Stipends

Everything you need to know about HR & your employees' favorite perk


As the old way of selecting individual vendors for perks becomes less valuable for employees, and more administrative-heavy for HR, companies are leaning on employee 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: stipends.

Here's what is covered in this guide:

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

What is an employee perk stipend?

First a definition:

An employee perk stipend is a sum of money given to employees dedicated to perks.

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 an employee 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 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

Example of typical spending for

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 Compt:

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

Employee stipends 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. Stipends 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 its 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.

Looking for a detailed description of their benefits? Click here to learn more.

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

See how Compt's Perk Stipends stack up

The number of software options to manage perks has grown tremendously in the last few years (trust us, we know). We want to help you select the best perks program for you, so we've built this handy worksheet with all the Compt details you need when evaluating vendors.

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 time to manage a clunky perks program
  2.  Increase engagement rates with perk program
  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 growing popularity [recent news]

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:

Help your people...

Increase mindfulness with a meditation app. Learn and network at a virtual conference. Fix a broken hot-water heater. Buy professional development books. Set-up their home office workspace. Buy an air purifier for their office. Sign up for virtual yoga classes. Access a convenient lunch. Buy a Peloton. Hire a health nutritionist. Eat nutritious foods. Cover daycare costs. Get fitness coaching. Buy running sneakers. Sip on healthy juices. Access fertility benefits. Splurge on their favorite beverage or snacks. Track their steps or sleep with wearables. Run a half marathon. Take fencing lessons. Pay down their student loan debt. Cover their cell phone bill. Pamper themselves with a massage. Take their children on a vacation. Level-up with an online course. And so much more.

and invest in what they need most.

How to Create an Employee Perk Stipend for Your Company

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 your company's mission, values, goals, or be 100% open to give employees complete freedom over their perks. Popular categories include: health & wellness, continuous learning, family, food, and travel.

Below are some of Compt’s most popularly used perk stipends (categories in which employees can spend their perk money in):

4) Set up your program. 

If you use a perk management software like Compt, this could take 15 minutes.

Or 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.

To supercharge your communication plan, create a forum for people to provide feedback. A simple Google form can help, or hold a series of office-hours.

[Starting with stipends? Check out this detailed guide on how to set up your perk stipend.]

What people buy with their stipend:

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
  • Peloton subscriptions
  • Fitbit wearable
  • Aaptiv app
  • Calm app 
  • Massages
  • Acupuncture


  • House cleaning services
  • Dog walking services
  • Babysitting and daycare services (i.e.
  • Museum passes
  • Meal delivery kit (e.g. Blue Apron or Purple Carrot)
  • Fertility benefits

Looking for a 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'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.