A work-from-home stipend is an employer-provided allowance, typically $1,000–$3,000 per year, that covers the cost of home office equipment, internet, phone, coworking, and other remote-work expenses. Employees spend it on what they actually need, and employers get a tax-efficient, low-admin benefit that surveys consistently show remote workers rank among their most desired perks.

Why offer one? Well, remote employees may get to skip the commute and the office, but they still rack up real expenses while working from home. The right work-from-home stipend helps cover those costs and keeps your team productive, comfortable, and connected.

What is a work from home stipend?

A work-from-home stipend (also called a remote-work stipend) is an allowance employers give their remote team members in addition to their salary to help them work more comfortably and productively. Like other stipends, it’s given at fixed intervals — typically monthly, quarterly, or annually.

The mechanics are simple: set a budget, employees spend it, and reimbursements flow through payroll via stipend software such as Compt. 

There are two main ways employees use work-from-home stipends:

• To cover ongoing expenses related to remote work
• To access general perks an on-site job would offer

The amount of stipend varies based on the company. Normally, it falls between $1,000 and $3,000 per year, depending on the company and what expenses it’s designed to cover.

Here’s an example:

We’ve prepared a comprehensive employer’s guide to work-from-home stipends. Check it out to learn more and see a few examples.

What are some examples of a work-from-home stipend?

There are three ways you can offer a work-from-home stipend, and the right approach depends on how specific you want to be about what employees can spend it on.

1. Narrow, dedicated WFH stipends

These are single-purpose stipends tied directly to home-office expenses. Employees spend the allowance on whatever they need to set up or improve their workspace.

A couple examples:

• $1,000 per year to cover higher-cost, low-frequency purchases like an ergonomic chair or standing desk
• $250 per quarter for smaller, rotating needs like a new webcam, headset, or office supplies that come up throughout the year
• $80 per month to cover recurring expenses like an internet bill, AI productivity tools, or a project management software subscription

Pro tip: Quarterly is the sweet spot for funding cadence. Our 2026 benchmarks show that quarterly-funded programs hit 85% utilization on average — higher than both monthly (52%) and annual (65%). This is because quarterly amounts are significant enough to act on and frequent enough to stay top of mind.

2. Broader programs that include WFH

We’re increasingly seeing companies want to consolidate their perks programs to make them more budget-friendly and broadly relevant. If that’s you, it’s better to skip the standalone WFH stipend and roll home-office expenses into an all-inclusive Lifestyle Spending Account (LSA).

With an LSA, WFH sits alongside wellness, professional development, food, caregiving, and multiple other categories. Employees self-direct based on what’s a priority for them personally.

This makes for ultimate flexibility. For example, you can offer flexible travel and entertainment benefits for remote employees that also cover home-office stipends without juggling separate vendors. And you can use one platform for wellness, WFH, and learning stipends.

3. Hybrid-specific WFH stipends

More than half (52%) of remote-capable employees split time between home and office as of early 2026. For those folks, some companies combine “work from home” and “commuter” categories into a single stipend.

Let’s say you offer $250 per quarter. Employees might use it to cover a transit pass one month when they’re commuting more, then spend the remainder on home-office upgrades when they’re working from home more often.

Our 10 favorite ways to spend a remote-work stipend

If you want to make specific recommendations or give your team some creative ideas, here are a few great places to start:

1. Home office essentials

Perhaps the most obvious use for a work-from-home stipend is to cover the cost of the core items your employees don’t have at home (or might need to replace/upgrade), such as:

• A desk and chair
• Laptop or desktop monitor
• Computer accessories (e.g., wireless keyboard, mouse)
• Printer and ink cartridges
• High-quality lighting
• Headset or microphone for video conferencing
• Office supplies (e.g., pens, notebooks, planners)

Some of these are items you may provide to all your new employees, e.g., a company laptop. In those cases, they may still use the allowance to purchase personalization items or accessories, like a laptop case.

The best thing about offering a stipend (as opposed to outright providing these items) is that employees can choose what they want and purchase them from their favorite retailers.

2. Ergonomic furniture

Every home-office setup has a desk and chair. Notice we didn’t say, “a good desk and chair.”

Nearly half of people make do with what they have lying around, and that can be less than optimal for their health and productivity. A study of 856 remote workers from Nulab found that those who used a proper desk and chair were considerably more productive than those who didn’t.

Ergonomic furniture is specialized equipment designed to support the human body properly. Here are a few examples of home-office furniture your employees can buy with their home-office allowance:

• Adjustable standing desk
• Ergonomic office chair
• Anti-fatigue mat for standing desks
• Footrest or ergonomic footstool
• Lumbar support cushion or back pillow

Standing desks, in particular, are a game-changer for productivity and employee health. They’ve been linked to reduced neck/back pain associated with sitting, increased focus and energy levels, and even lower risks of heart disease and obesity.

3. A coworking membership

Unless you’re eating at restaurants, out with friends, working out at a gym, or shopping, remote working might translate to “never leaving the house.” If that’s the case, a change of scenery is often all you need to stay engaged.

Coworking spaces provide the variety and social interaction remote employees need to keep them happy, healthy, and productive.

Basic hot desk memberships typically start at $150–$300 per month, with dedicated desks and private offices running $300–$600+ depending on the city. In major metros like New York or San Francisco, costs are significantly higher. That’s expensive for employees, but if you don’t have a nearby office your employees can go to, you’re already saving far more than this on overhead expenses.

In fact, plenty of remote companies offer an optional stipend/reimbursement program specifically for coworking memberships. If that isn’t you, your team can use their remote stipend to cover some or all of the monthly membership.

4. Cell phone and internet bills

You might offer cell phone reimbursement or an internet stipend as a standalone perk. For distributed and remote-heavy teams, it’s often worth rolling these two into one.

On average, a home internet bill costs $78 per month and a cell phone bill at $157. That adds up to roughly $2,820 in savings per year for your team members.

Unlike other kinds of stipends, those for phone and internet costs are unique in the sense that they aren’t considered taxable income when properly structured as a business reimbursement. So, they don’t count towards your employees’ federal, Social Security, and Medicare taxes.

5. Digital tools

You can get pretty far with free tools and software platforms, but you may want a professional subscription to some like:

• A project management platform like Trello, Asana, or Notion
• AI tools such as ChatGPT, Claude, or Perplexity
• Design software like Canva or Adobe Creative Suite
• Automation tools like Zapier or Make for connecting your apps and streamlining repetitive workflows
• Focus and planning apps like Reclaim, Sunsama, or Motion

Most of these programs are fairly inexpensive, but it’s nice to know that if your employees need a premium feature for one of them, they can buy it without having to think about it too much.

6. A solid webcam and mic setup

You don’t need to be a podcaster to have one. If you live in and out of virtual meetings, this is an absolute must.

Laggy video and audio quality are flat-out ugly, distracting, and … well … amateur. Whether you’re meeting with clients, prospects, and partners or screen-recording product demos, looking professional is the key to getting others to take you seriously.

There are high-end options out there, but a solid webcam and USB mic setup can run less than $100 — well within what a remote work stipend covers.

7. Laptop stand

For hybrid and remote employees who frequently work from a laptop, a stand saves their necks and backs from the inevitable pain and discomfort that come from hours of staring, hunched over, at a screen.

Laptop stands come with the added benefit of creating more desk space, so your employees can set up a second monitor if they want.

They’re fairly inexpensive, too. You can pick one up for around $20–30, which means your employee’s home-office stipend will definitely cover the cost.

8. Plants, art, and other room accessories

The environment has a lot to do with productivity. And that goes for all your employees, inside and outside the office. (People personalize their desks at work, don’t they?)

Harvard Business Review’s 2023 research found a strong connection between contact with nature in workplace settings and attitude/job performance.

The reason is simple: plants, the sound of running water, and other outdoor elements can help reduce stress, increase focus and creativity, and can sometimes even improve your room’s air quality.

It goes far beyond nature, though. The ability to foster a deep, emotional connection to a personal space is what makes all the difference.

Here are a few other ideas:

• Artwork, like wall decorations, paintings, or a tapestry
• Window shades to block out the sun at certain points of the day
• Soundproofing or white noise equipment to minimize outside distractions
• A diffuser or air purifier
• A comfy rug to make the space feel warm and inviting

9. Under-the-desk treadmills and ellipticals

Tiny treadmills and ellipticals have been gaining popularity as a new way to get additional movement while avoiding prolonged periods of sitting in a desk chair, which has been linked to a host of serious health problems.

As the name suggests, under-the-desk treadmills are designed to fit underneath a standing desk.

They only reach speeds of ~5 mph, but that’s all you need to get the blood flowing (plus, any faster would make it tough to focus on work).

Ellipticals are quite similar. They fit under any desk, and your remote workers can use them while standing or sitting.

Like many of the other things on this list, you can find a good one for $50–$100. That’s what makes it perfect for a remote work allowance.

10. Anything your in-office team has!

Depending on the employee perks you offer your in-office team members, you may want to give your at-home workers more than just a cool remote-work setup.

Anything your employees can use to boost their mental health, improve their work-life balance, or invest in their personal development is fair game for a work-from-home stipend.

For instance:

• Health and wellness items like yoga mats, meditation apps, or noise-canceling headphones
• Gym memberships or workout classes (virtual ones included)
• Learning courses, books, or online classes that align with their career goals
• Monthly or quarterly subscriptions to products/services they really enjoy (e.g., meal kits, coffee deliveries, or wine of the month clubs)
• Charitable donations to organizations they care about
• Food delivery app purchases (e.g., if your physical offices get free catered lunches)

The options are endless — which is exactly the point. The best remote work stipends aren’t prescriptive; they give employees the flexibility to spend on what actually matters to them, which makes them an inclusive benefit.

How to structure a work-from-home stipend program

The Compt step-by-step methodology for setting up a compliant remote-work stipend involves the following six steps:

1. Decide on the benefit structure.

The first decision is whether to offer a dedicated WFH stipend or roll home-office support into a broader LSA with “work from home” as one eligible category.

A standalone WFH stipend sends a clear, deliberate message: we see our remote employees, and we’re investing specifically in their ability to work well from home. It’s highly communicable and keeps spending focused on home-office needs.

LSAs are more flexible and naturally better if your goal is to not tack on too many individual benefits categories. The tradeoff is that WFH becomes one of many categories rather than a named, visible commitment to your remote workforce.

2. Set your budget and cadence.

Start by running through three questions:

• What’s your total benefits budget per employee?
• What portion do you want to allocate to WFH specifically?
• Does that number cover the core expenses you’re trying to offset?

Let’s say your goal is to cover home-office equipment and internet. You’d need ~$1,300 per employee per year to hit the median for both categories, according to our 2026 benchmarking report (office equipment: $250/year, cell and internet: $1,080/year).

If instead you’re running an all-inclusive LSA with remote work as one of several categories, the median budget among Compt customers is $1,200 per employee per year, which is enough to make a dent across multiple expense types without breaking the bank.

For smaller remote populations — e.g., a handful of full-time contractors or a hybrid team that’s mostly in-office — a one-time equipment stipend of $500 to $1,000 at onboarding may be all you need.

As for cadence, as we mentioned before, quarterly is the clear winner, but you might choose monthly if your stipend is specifically designed to offset recurring expenses like internet and phone bills, or annual if it’s for one-time or infrequent purchases.

3. Define WFH stipend eligibility.

Before you launch, decide who the benefit is for. Fully remote employees are the obvious starting point, but hybrid employees may qualify too if they’re working from home several days a week. Some companies extend WFH stipends to contractors working 30+ hours a week as well.

The other question is timing. Most companies offer the benefit from day one, which works well during onboarding. But you might choose to apply a 30- or 90-day probationary period before employees can access funds; this is more common for higher-budget programs such as professional development.

4. Set your reimbursement policy.

The most common WFH stipend categories cover:

• Home-office equipment
• Internet and phone
• Coworking and productivity
• Office supplies

One additional consideration would be for remote workers who fly in for company off-sites. Treat travel, accommodation, and meals for those trips as a separate reimbursable expense, not a draw against their WFH stipend. That way, they’re not burning through their annual WFH allowance on a trip the company asked them to make.

LSAs are naturally a lot broader, so to define categories without admin headaches, be specific about what isn’t allowed and otherwise be as inclusive as possible. A shorter exclusions list is easier to enforce than trying to enumerate every eligible expense. And a more inclusive policy drives significantly higher participation.

5. Connect it to payroll and launch.

Once your policy is set, configure it in your stipend platform, map each category to the correct tax treatment (WFH equipment is nontaxable; most LSA categories are not), and connect reimbursements to your payroll cycle. 

With Compt, you can do this in less than an hour.

Before launch, communicate the benefit clearly to employees, including what’s covered, how to submit expenses, and when they’ll see reimbursements. Don’t sleep on this — employees who don’t know how to use their benefit … won’t.

6. Track participation and utilization.

Three numbers matter:

• Activation (did employees set up their account?)
• Participation (are they submitting claims?)
• Utilization (how much of the allowance is actually being used?)

Track these figures among eligible employees. Compt’s benchmark for a healthy stipend program is 70%+ utilization, and our dashboards make monitoring these metrics simple. 

How Compt handles work-from-home stipend compliance

You may have some concerns when it comes to work-from-home stipends:

• Accounting and tax compliance (e.g., how will you manage taxable vs. nontaxable items?)
• Budgeting and eligibility
• Enrollment and participation
• Defining eligible expenses
• Stipend platforms vs. manual reimbursement tracking

Compt’s stipend dictionary comes with pre-built category definitions for remote-work expenses. Home office equipment, cell/internet, coworking, and supplies are already mapped to the correct tax treatment, so your payroll team isn’t making judgment calls on every reimbursement. 

And once the program is live, enrollment, receipt verification, approvals, and payroll sync are all handled in the platform, which means the concerns above go from ongoing admin work to a one-time configuration.

Ready to offer a work-from-home stipend? Request a Compt demo to get started.

FAQs: Work-from-home stipends for remote and hybrid work

Editor’s note: Compt software supports the categorization and proper reporting of benefits according to IRS guidelines, helping businesses maintain compliance. However, Compt cannot provide tax advice, and users should consult their own tax, legal, and accounting advisors when necessary.

Editor’s note: Originally published in 2024, this post has been recently updated for clarity and relevance for our readers.