Work from home stipend: why remote workers still need it

You may have heard the news that Google is saving $1 billion per year as a result of employees working from home. The savings were so great that now, Google plans to have 20% of their workforce be permanently remote.  

Your organization has probably reaped the financial and productivity benefits of remote work as well. 

But do they offer a work from home stipend?

In  our 2020 research of over 100 remote work companies, only 38% provide some gear for their employees, and only 26% offer access to gyms or wellness programs, primarily through stipends and reimbursements.

With hybrid-return to work plans and fully remote goals becoming the norm for the next six months, employee benefits might get lost in the mix. If your company hasn’t provided their remote teams with a stipend, it might feel like an awkward conversation. No one wants to send a disgruntled email demanding a stipend for office equipment. 

However, when you look around the world of remote work, you’ll find that is an entirely reasonable request to make. The money that companies are saving in office costs and increased productivity should be invested back into their distributed workforce.

This boosts companies’ appeal and company culture for new remote workers. It also increases current employee moral and retention.

Learn more about stipends, how to use them, and how to request one from your company below. 

What are stipends

Generally speaking, a stipend is an amount of money given by a company to their employees to purchase goods. The money is distributed as a bonus and will not be recollected or deducted from employees’ salaries. 

A stipend is the opposite of expense reimbursement, which consists of employees paying their own expenses and then getting refunded by their company.

Typical stipends you’ll find in an office setting include benefits for wellness (like gym memberships and health food club cards) and pay for parking and parking spaces. There are two types of stipends in the world of remote work: 

1. A home office stipend 
2. A remote work stipend

How do stipends work?

You can deposit stipends directly into your employee’s bank accounts or develop a relationship with a local retailer or e-shop. If you choose to partner, the store will give your employees login information with the stipend already available in a virtual wallet. 

Partnering with a distributor can save money because they will likely give a discount on some of their goods. Individually depositing the stipends will also take more time and won’t guarantee that your employees’ equipment will be up to the same quality. 

The amount remote employees receive for a stipend is entirely up to the company. You can have each employee receive the same amount or have it based on seniority or work experience, or position in the company. 

Stipends can also be distributed based on their intended purpose. You can have separate stipends for coffee and internet with a larger lump sum stipend for initial home office setup. 

Stipends can be taxable and viewed as income. Employees should include stipends in their income taxes and set aside money to cover them. However, all stipends are not taxable, and companies will not deduct from them for social security or Medicare. 

To be sure if you’re stipend is taxable, you should ensure it is a benefit and not a “replacement for compensation.” Sometimes stipends will make up the deficit between your wage and the average wage for that position on the market. In this case, the stipend can become taxable. 

Home Office Stipend

This is a stipend specifically intended for outfitting an employee’s home office and remote work expenses. They can spend the funds on a new computer, a desk, a monitor, or high-speed internet. The purpose is only to make the home office space more manageable and more efficient for work. 

These stipends can be paid in one lump sum at the start of remote work or distributed monthly or yearly. A typical monthly home office stipend would be for things like the internet and electric bill to help ease additional costs. 

Home office stipends are more common among companies that are new to the world of remote work. They give employees this benefit to ease their transition into a new work environment and show support. 

One employer, Webflow, is an excellent example of how companies are handling the home office stipend. The company was already remote before the pandemic and offered their remote workforce $250/month in equipment costs. They increased that total by 50% after the pandemic. 

Other companies like Box in Redwood City, California, started giving its employees $600/month to compensate for perks they received in the office. 

Remote Work Stipend

You can also use a remote work stipend for purchasing home office equipment, but they’re more like a standard stipend you would give to any employee.

While this stipend might go directly to office furniture and internet connection anyway, it can also be spent on things like membership to a co-working space or transportation to a place of work (or transportation in general if they're telecommuting).

It’s common for employees to use remote work stipends on widespread benefits that in-office employees enjoy, like health and wellness programs and classes to advance experience. Our study of 100 remote companies found that 42% had learning and development options. 

Remote work stipends are more popular than home office stipends due to their diversity and have been offered by companies for years before the pandemic.

They typically consist of a wide range of benefits that the model put forward by Basecamp perfectly exemplified (In a controversial move they recently took away all these benefits and added the money spent to their employee salaries).

They offered $100/month for both fitness and massage and $200/month for a co-working space. They also had a $1000 annual education allowance and $2000 yearly stipend for charitable donations. 

Basecamp represented the highest bar for remote worker benefits. For prospective remote employees, these benefits gave them a competitive edge but with the changes by leadership we will see how many employees hit the road.

Companies like Tulip and Workflow provide a representation of more modest remote work stipends. Tulip offers a one-time $500 stipend for home office setup, and workflow gives $200/month in health and wellness items. 

What is the cost of working from home? 

To estimate the cost of a home office setup, you first need to do some inventory and find out what your workers need. Some employees may already be mostly equipped while others could have close to nothing for work in their houses. That’s why the first step to calculating home office expenses is sending out a survey or questionnaire to determine overall needs. 

Some of the things you’ll want to ask about on your questionnaire are equipment, the internet, and electricity. The standard home office should have a desk, mouse, monitor, laptop, keyboard, and office chair.

Assuming your employee already has a laptop, the rest of these items will cost about $1000 if you purchase all of them as their cheapest model on Amazon.com. 

When considering the internet, the average cost of high-speed (you’ll need it if you want decent conference call quality) internet in the United States is about $50 per month. Home offices can add more than $30 to any electric bill. 

How to ask your company for a stipend

All negotiations don’t have to be hostile. Your company's executives consider you a valuable employee, and the odds are they want to keep you happy and work efficiently. The main concern for employees should be how much money to ask for when requesting a stipend. 

Management and HR departments always appreciate thoroughness. We recommend doing an in-depth analysis of the money you and your team are spending to work remotely (either on equipment or services like internet and electricity).

Then create a presentation as a distributed graph while also highlighting the  productivity and retention benefits of any requested upgrades. 

Once you have all the figures together, you can present your findings to your company. Finally, you can give examples of other remote companies that provide this benefit and the annual returns they receive as a result.

Request GroWrk at your company and help them discover the best work-from-home solution for your team today!

The challenges of offering a stipend

Stipends will make your company more attractive to prospective employees and make your current remote workers feel appreciated and supported. However, they do come with some logistical challenges. 

As we mentioned earlier, stipends can be distributed to employees’ bank accounts or handled through a partner equipment or service provider. That means you’ll need a staff member to individually assign each stipend and contact the provider or add the totals to your employees’ salaries.

After that, either the HR staff or the employees will have to handle the equipment’s ordering and delivery. These processes take a lot of time that employees can spend working on a company-related task. 

On top of that, there is no guarantee that this equipment will be of the same quality or fall in line with the company’s values. Suppose one of these employees leaves, collection of the stipend equipment will rely on the leaving employee shipping it back to a warehouse or another employees apartment.

It is also challenging to give the same stipends to people living in different countries as equipment costs vary greatly. 

The alternative to a stipend with the same benefits

Fortunately, there is an alternative to stipends that can streamline all these processes and still offer the same rewards. GroWrk has established a service that distributes laptops and devices to +150 countries. 

They have a dashboard that allows managers to assign stipend amounts to each employee. Employees can then select state-of-the-art equipment from GroWrk's extensive catalog.  

GroWrk will save your office managers the time and headache of equipment delivery. They give you full insight into the lifecycle of all your equipment for both onboarding new employees and off-boarding team members. Nothing a simple partnership with an e-shop offers.

Their website was designed specifically for this purpose and works with all budgets, offering six-month, year, and two-year payment plans on all their items.

Plus all their laptops come preinstalled with Apple business manager or JumpCloud, to fix any issues that can arise and stay cyber secure while working remotely.

Wrapping up

Suppose your company isn’t already offering a WFH stipend for remote workers. In that case, it is time to join the movement and place yourself at the forefront of the remote working revolution.

Your employees converted their homes into offices and have weathered the storm of a global pandemic. All while increasing their productivity. It’s time to give back. 

Discover the platform that will get your distributed team everything they need to be successful. From laptops to standing desks, from the U.S to any location in the world.            

Schedule a call now