The Ultimate Guide to Remote Work Stipends

The only perk that solves for the unique needs of all of your remote employees.

In a "Navigating COVID: Returning to work" report from SHRM, they found that 68% of organizations say they probably or definitely will adopt broader or more flexible work from home policies for all workers. (SHRM, 2020).

With more people across the globe working remote due to COVID-19, companies are being forced to adapt to the needs of their most important asset: their people.

The ideal method perk for your remote employees and HR is a remote perk stipend.

With stipends, you're able to offer more perks with less money, to everyone regardless of where they work, and who wouldn't want that? That's why we developed this guide to everything you need to know about remote work stipends.

Here's what is covered in this guide:

  1. What is a remote stipend
  2. Examples of remote work stipends
  3. Benefits of remote work stipends
  4. What people spend their remote work stipend on
  5. How to create one for your organization

What Is a Remote Work Stipend?

First, a definition:

A remote work stipend is a sum of money given to employees for them to use to access perks.

A remote work stipend can be used in one or both ways:

  1. to purchase office equipment, a coworking pass, coffee, and anything else that makes their remote work locations comfortable, productive, or successful. It can be a one-time equipment stipend, or an on-going one.
  2. to purchase general perks that an on-site team has access to such as food, health and wellnesslearning and developments perks.

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

As mentioned above, when setting up a remote work stipend, there are two approaches:

  1. You can set up a stipend to help them build their remote work environment, or
  2. You can set up a general perk stipend that gives your team access to personalized perks. If you're a hybrid company, you can craft this type of stipend so that your support your remote people and o-site people equally.

Below are three examples highlighting the 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
  • $1,000/year (for everyone) continuous learning stipend

Learn more about how Compt helped Webflow make perk allowances possible at their company.

2. Basecamp, an almost-fully remote company. 

They offer the following perk allowances for their team members:

  • $100/month coworking space stipend
  • $100/month fitness allowance
  • $100/month massage allowance
  • $1,000/year continuing education allowance
  • $1,000/year matching charitable gifts stipend

To learn more about these in-depth and the thinking behind them, check out their post on employee benefits at Basecamp.

3. Buffer, a fully-remote company.

  • $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 these perks and their budget vs spent in 2019, check out this in-depth post about Buffer's perk stipend audit.

There are many more examples of companies doing this successfully. If you want to hear what our customers are doing,  click here to talk with a Compt benefits specialist.

Benefits of remote work stipends

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

Tactical benefits:

Better perks:

  • 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. 

Increased efficiency:

  • 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. 

IRS compliance:

If you use a software like Compt, you have built-in IRS compliance, a focus for people leaders and finance teams everywhere.

Strategic benefits:

  • 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.
  • Mindful spending: Because employees 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.
  • Deeper connections: 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.

Additional benefits:

  • Your company has access to a greater pool of top talent, and a better ability to retain talent who wants more flexible work from home options.
  • What people purchase can relate to their home working space, work life balance, mental health, or anything else that suits them and their always-evolving needs.
  • You provide them with the best, most relevant reward they could receive. As a NYTimes piece put it, so many people aim for the "big reveal" but when giving gifts, people want something they can actually use.

If you're still wondering why your remote team should have perks, here's a piece detailing why your remote employees need support like your on-site team members

[Considering between perk software vendors? Check out our guide, "Comparing Perks Software: Everything You Need to Know]

What do people spend their remote work stipend on?

Here at Compt, most of our customers who set up remote work stipends select one or more items from the following broad-based categories for their employees to spend in.

The broad categories is a deliberate approach to remote perks. With a broad-based approach, you're able to avoid building out a long list of vendors and initiatives you'll cover. If you do want to pick specific vendors, then you may want to go with a vendor-based approach.

Learn even more about the benefits of Perk Stipends & Lifestyle Spending Accounts

Download the free eBook to find out why perk stipends and lifestyle spending accounts have become the most common new perk.

Here’s How to Set Up a Remote Work Stipend:

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.

A holistic perks platform

See how a remote work stipend would work at your company, and how it can help your company achieve even greater success.