A remote work stipend is a sum of money given to employees for them to purchase on office equipment, coworking space, coffee, and anything else that makes their remote work locations comfortable and successful.
Further details on what they are:
Stipends can be given out on a monthly, quarterly, semi-annual, or annual basis.
It is comprised of taxable and non-taxable items. Taxes can be grossed up by the employer or employees can cover the taxes
Three Examples of Remote Work Stipends
When setting up a remote work stipend, there are two approaches. You can set up a stipend to support your remote employees so that you're supporting them equally as your on-site team. Or if you're a fully (or mostly) remote company, you can set up all sorts of stipends to support your remote team members since offering on-site perks isn't a possibility.
Below are three examples highlighting the two unique approaches.
1. Webflow, a company with 70% of their team remote around the globe.
They provide three stipends for their team:
$250/month for remote workers
$200/month (for everyone) health & wellness stipend
Many companies from are turning to stipends to solve for their employees in more meaningful ways.
First, the tactical benefits:
Your team gets access to a broader base of benefits without needing to increase the overall budget. Because the pool of money is distributed to people, they pick what’s best for them instead of picking a few perks that everyone gets.
Help employees get what they need when they need it, regardless of where they live.
Decrease the administrative burden on HR by avoiding vendor management in various locations, and/or eliminates the need to manage various software.
Most organizations can agree, perks offered the traditional way wastes money on two fronts: 1. spending money on perks that go unused and 2. spending valuable people time on picking, piloting, purchasing, managing, and communicate perks. With stipends, all of that is cut out and everyone gets what they need when they need it -- no wasted money or time.
If you use a software like Compt, you can also ensure 100% IRS compliance which has become a big focus for people leaders and finance teams everywhere.
Align with culture/values: Can be adapted to offer all perks or support company values like a continuous learning stipend or a health and wellness stipend.
Scalable: Using a perk stipend allows you to easily scale up (or down) a perks program,
Because they get the money to pick what’s best for them, they spend more mindfully. Instead of requesting perks willy nilly, people are more thoughtful about what they spend their money on.
Perk allowances enhances the connection between employers and their team because they infuse trust. When people get to exercise autonomy and are treated that they’re the experts of their own world, the relationship deepens and becomes richer.
Learn Even More About the Benefits of Perk Allowances & Lifestyle Spending Accounts
Download the free eBook to find out why perk stipends and lifestyle spending accounts have become the most common new perk.
1. First determine how much you want to offer your team members, within what timeframe.
Some examples include offering $100/month, $500/quarterly, or $2,000 annually. If you are interested in getting insight into what the most successful companies do, we can share some insider information. You can also decide you want to offer a stipend only to remote team members, or one to them in addition to what you offer all employees.
2. Secondly, select your perk spending categories.
In the examples above, you'll notice that they most often surround a category of spending like health and wellness, continuous learning, family, or travel.
Doing it this way allows you to create a custom program for your team, and then allows 100% personalization for them.
If you're looking for ideas for spending categories beyond a remote stipend, consider tying them to your company's culture, goals, or important culture initiatives.
3. Once you have this information determined, now it’s time to decide how you’ll manage the process.
Your options include:
Managing the perk allowance 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).
Choose a software to help you manage this. Options like Compt can help communicate your programs to your team members, track balances and spending, and scale the process for you which eliminates a large portion of work, and provides valuable metrics. Plus, Compt is 100% IRS compliant which makes you and your finance team's job much, much easier.
Ready to learn more about Compt?
We help people-first companies like yours to build, streamline, and scale their employee perk allowances. You get all of the personalization, without any of the headache of managing them.
Our customers are the best, and here's a few quotes on what they have to say about us:
"I'm SO excited to use Compt! In 2020 I am going to actually attend a holiday party AND have my hair and nails done rather than all of the manual stuff I did in 2019 to manage wellness stipends in Expensify." - Toni, a new Compt customer.
"We had 330 perk receipts submitted in the month of June. Just imagine if we tried to do this manually or use an expense software, then it would be going through finance, cost more money, and it also wouldn’t be an accurate line item. It’s just much easier to manage this way." Heather Doshay, Webfow. (Check out their case study here)
And below is a piece of (unsolicited) feedback we received from a customer of ours, Josie Joling.