What is a work from home stipend?

A work-from-home stipend, also known as a remote work allowance, is an amount of money employers pay beyond an employee's base salary to cover expenses related to remote work. Companies can either provide the stipend as a single lump sum or a repeat payment on a chosen schedule (e.g., monthly or yearly). For companies with remote or hybrid structures, offering work-from-home stipends is a great way to stand out and appeal to more employees.

Are work-from-home stipends required?

U.S. law does not currently require companies to offer work-from-home stipends. However, each state has different employment laws.

Some states do require expense reimbursements:

• California: Requires reimbursement for necessary remote work expenses

• Illinois: Mandates coverage for phone bills and internet access

Similarly, every country has its own legislation and guidelines for offering work-from-home stipends and reimbursements. Some countries offer flexibility when covering expenses, while others focus on the increase in utility usage or equipment purchases and maintenance.

Looking for specific details on how to hire around the world? Check out our hiring guides. (There are over 50!).

Is a work-from-home stipend taxable?

A common question from employees and employers alike is whether work-from-home stipends are taxable. In the U.S., work-from-home stipends are generally considered taxable income because they're monetary compensation. Employees who receive these stipends must report the amount to the Internal Revenue Service (IRS) and pay taxes on that income.

By contrast, if employees purchase equipment to work from home and receive reimbursement for those expenses from their employers, that income is typically not taxable. How a company implements work-from-home allowances will dictate whether the company and its employees must pay taxes on that money.

Companies hiring internationally must consider local laws and tax regulations before offering work-from-home stipends to remote workers abroad. Each country and region may have different tax laws governing non-salary compensation, like work-from-home stipends.

International tax treatment varies significantly by country:

• Belgium: Up to €130 tax-free per month, requires employer tax filings

• Canada & Netherlands: Tax relief on daily allowances for home working

• Spain: No cap on amount, but requires 30% home working within 90 days

By contrast, the U.K. limits its tax relief to workers who either live far from their company's office or work for a company that doesn't have a physical office. The types of expenses that qualify are also restricted to business phone calls and utilities in the work area.

Australia also allows workers to deduct work-from-home expenses from their taxes. These workers can choose between a fixed-rate method, where they calculate the increase in their running expenses due to working from home, or an actual cost method based on all the expenses incurred while working from home.

What are the benefits of work-from-home stipends?

For employees, work-from-home stipends offset the increased costs of remote work. These costs typically include:

• Equipment purchases: Desks, chairs, and computer monitors

• Increased utilities: Higher electricity and water bills from being home all day

• Office supplies: Basic materials needed for productivity

Though work-from-home stipends increase compensation costs, they deliver several key benefits for employers:

• Talent attraction: Stand out in competitive hiring markets

• Employee retention: Show you value your team's needs

• Increased productivity: Better equipment leads to better performance

• Cost-effectiveness: Initial investment often pays for itself through improved outcomes

What can work-from-home stipends be used for?

While companies can set their own policies, the goal of a work-from-home stipend is to help employees create a safe, comfortable, and productive home office environment. This gives your team the flexibility to purchase what they need most, without the administrative burden of submitting expense reports for every item.

Common eligible expenses often include:

• Office furniture: An ergonomic chair, a proper desk, or lighting.

• Technology and equipment: External monitors, keyboards, a mouse, or headphones.

• Utilities: A portion of monthly internet or phone bills.

• Office supplies: Notebooks, pens, and other essential stationery.

Work-from-home stipend examples

Each company sets its own work-from-home stipend structure if they choose to use one. Here are some examples:

• Facebook allows full-time employees to work remotely if they choose. For employees who choose remote work, Facebook's work-from-home stipend is a one-time $1,000 payment.

• T-Mobile USA provides its employees with an annual work-from-home stipend of $2,000 as part of its benefits package.

• Webflow uses a monthly structure for its work-from-home stipend policy, offering $250 per month to employees who work remotely.

• Like Facebook, Google's work-from-home stipend is at least $1,000 in a lump-sum payment to cover expenses employees incur setting up their home offices.

• During the pandemic in 2021, the Salesforce work-from-home stipend was $500—two $250 payments for office equipment and tools.

The average work-from-home stipend ranges from $250 to $2,500 in total. Companies should consider offering stipends on the higher end of this range to attract top talent, especially in the technology industry, where work-from-home stipends are more common.

Supporting your global remote workforce

So, what does offering a work-from-home stipend really say about your company? It signals trust and shows you're invested in your team's success, wherever they work. When you remove the financial friction of setting up a home office, you're empowering people to do their best work.

As you build your global team, providing thoughtful, compliant benefits like stipends is key to creating a great employee experience. Oyster makes it simple to care for your team everywhere. Start hiring globally and offer competitive, compliant benefits with one platform.

FAQs

What is a typical work-from-home stipend amount?

Amounts vary widely, but most companies offer $50-$250 monthly or a one-time $500-$1,000 setup payment.

How do work-from-home stipends differ from expense reimbursements?

Stipends are fixed allowances (usually taxable) that give employees spending flexibility, while reimbursements repay specific, pre-approved purchases (typically non-taxable).

Can companies offer different stipend amounts to employees in different countries?

Yes, adjusting amounts based on local cost of living and market expectations ensures fair, competitive benefits for your global team.