Cell phone stipends have become increasingly common over the years as organizations began adopting “Bring Your Own Device (BYOD)” policies. The concept started in 2009 and became increasingly mainstream in the years following.
According to recent research from Ntiva, an IT consulting firm, 82% of organizations have a BYOD program. Plus, companies that switch to BYOD devices can save up to $341 per employee
Given the clear benefits that come from BYOD policies, this guide details everything you need to know about cell phone reimbursement stipends (also known as cell phone allowances or mobile phone reimbursement)
What is a Cell Phone Stipend?
First, a definition:
A cell phone stipend is a sum of money given to employees to cover all or a portion of the payments on cell phone plans.
Further details on what they are:
They’re also referred to as ‘cell phone reimbursement stipends,’ ‘cell phone allowances,’ or a ‘mobile phone reimbursement.’
Stipends are commonly given out monthly to align with cell phone billing cycles.
Commonly asked: “Are cell phone allowances taxable?” — no, it is a non-taxable benefit.
Skip the Guide: Ready to implement your own cell phone stipend at work? We can help you quickly and easily put one in place, taking care of tax compliance and maximizing choice for your employees.
A recent study shows that over 75% of employees use their personal cell phones for work-related activities, highlighting the blurred lines between personal and professional device usage.
Covering your team’s cell phone bill is an especially good idea when team members use their personal cell phones:
to make work calls
to check and respond to email
to post updates in work-specific accounts and apps (like ClickUp, Trello, or Smartsheet)
be accessible via Slack, MS Teams, or whatever internal chat system you use
to test functionality on mobile devices
If your team members are expected to work long hours, be accessible during off-hours, or use their cell phones for work, providing them with a cell phone benefit is ideal.
In our 2025 Lifestyle Benefits Benchmarking Study where we analyzed Compt customer stipend usage data, Cell Phone spending was the #6 utilized category for claims submitted. Cell phone and internet stipends remain a top category, rising to 10% of all stipend claim categories from Compt users.
A few of the benefits:
While cell phone stipends is a non-taxable benefit you can offer your employees, when done through perk management software like Compt, they are scalable benefits and are 100% IRS compliant.
Setting up an IRS-compliant cell phone reimbursement stipend also helps clarify what your company covers and how, making it more likely for your employees to be more mindful of their work-related cell phone usage and expenditures.
Not to mention, it’s far cheaper and less complicated to implement BYOD and offer a stipend than it is to purchase cell phones for all employees.
Let’s say you’re a 250-person company. According to data from Samsung:
The average cost of purchasing a mobile phone for business use is approximately $652 per employee.
While businesses can typically negotiate lower rates than consumer plans, a 250-person company is still looking at about $42 per month per line, totaling $504 annually per employee.
IT support, administrative tasks, and any outsourced services related to mobile device management costs an average of $458 per employee annually.
Don’t forget about the importance of security here as well. Your Mobile Device Management (MDM) software for security and oversight is likely an additional $60 per employee.
With all of these stacking up, the total cost to provide a company cell phone is roughly $1,674 per employee per year. And that’s not counting overages, insurance, fees for lost or damaged devices, or the deductions and tax compliance resources going into it.
In their 2022 Maximizing Mobile Value survey (done in partnership with Oxford Economics), BYOD policies with stipends average $893 per employee per year — 53.35% cheaper than providing company-owned devices.
And with Compt, you can automate the compliance process, which saves you even more time and money, while giving them complete control over their device choice and usage.
10 Examples of Cell Phone Stipend Programs
There are two approaches to setting up a cell phone program.
You can set up a stipend to reimburse your team for cell phone plans, or, as we discussed above, you can create a broader program that includes cell phones and other work-related categories.
Below are examples highlighting the two unique approaches.
The Strava workforce is eligible for a $1,000 annual gear stipend, but claim reimbursements must be for mobile phone expenses andgym memberships.
Psst: There are more examples of companies doing this successfully. If you want to discuss what our most successful customers are doing with their stipend programs, our team at Compt is happy to help. Click here to talk with a stipend expert.
Ready to set up a cell phone stipend?
Learn how managing a cell phone stipend through Compt reduces admin for your team.
‘Cell Phone Reimbursement Stipend’ vs. “a ‘Work-Support Stipend’
When most people consider covering their team member’s work-related expenses, many stop at cell phones.
However, in today’s world, people are not only using their cell phones for work but also often spending personal money on work-related expenses such as noise-canceling headphones, ergonomic mice, monitors, Wi-Fi/internet bills (especially for those who are remote), software, and more equipment.
Many of today’s culture-forward companies go beyond the traditional cell phone reimbursement model. They are considering other ways to support their employees through work equipment or a remote work stipend.
The major benefit of using the equipment model is that you can cover the same amount of money for your employees but give them more options and control over what they spend that stipend on. For example, they can choose to cover their cell phone and any other work-preference-related personal expenses.
Throughout this guide, we’ll be discussing both types of stipends.
How to Decide Between BYOD and COPE
First, what do these acronyms stand for?
COPE = ‘Corporate-Owned, Personally Enabled.”
BYOD = ‘Bring Your Own Device’
If you plan to buy the cell phones and the plans and distribute them to your team, that’s COPE. BYOD is your go-to plan if you reimburse all or some of your employees’ cell phone plans.
To decide between the two, you have to determine what matters most to your company.
According to the latest data, the global BYOD market is currently valued at $110 billion, but that number’s set to triple to $330.6 billion by 2030, reflecting the massive trend toward this option.
If security is a big concern or you cannot track your employees’ location, then COPE is likely the right path for you. Be careful, though, because it’s important to realize that with the COPE approach, you’re going to manage the cell phone devices, plans, bills, and everything else that comes with owning a cell phone (or hundreds of them), which can take a lot of work.
Options for Cell Phone Stipends or Lifestyle Benefit Allowances:
Process options:
A simple reimbursement model was the only option available for the longest time, but that’s not true anymore. As the benefits/perks market has evolved, so have the options available for employers.
Below are some options you have for offering your employees a cell phone reimbursement stipend:
Give employees a specific monthly amount and reimburse them through expense software such as Concur or Compt.
Give employees a ‘Cell Phone Stipend,’ reimbursed through IRS-friendly employee benefit platform (again, like Compt). This option is different from the one above because it highlights the cell phone stipend as a benefit, not as a business expense.
Give employees a ‘Work Equipment Stipend,’ a ‘Productivity & Tech Stipend,’ or a ‘Remote Work Stipend‘ where employees can have their cell phones reimbursed as well as hardware like mice or monitors, software and anything else that helps them be more successful at their job. If you choose this workstyle benefit option, this type of stipend could comprise some taxable and nontaxable items, making IRS tax compliance even more important.
This tracks with external research from Samsung and Oxford Economics, which found that 98% of companies with bring-your-own-device (BYOD) policies offer a monthly mobile stipend. The average amount? $40.20 per month, or $482 annually—just enough to help employees cover their phone plan or even put it toward a new device.
How to Set Up a Cell Phone Stipend
1. First determine how much you want to offer your team members, within what timeframe.
Most companies offer cell phone stipends every month, but you can do quarterly or annual — whatever is best for your situation and team. Then, determine how much.
Based on our customers’ programs, we suggest $50 for low business use and $75 for high business use.
2. Second, select your perk spending categories.
Next, decide if you’re offering a cell phone reimbursement spending option only or creating a larger, more comprehensive program around all work-related expenses. The latter is considered more of an inclusive perk program and would cover items like hardware, home internet bills (especially great for remote employees), software, and anything else that helps your employees enhance their work abilities and experience.
3. Then, you’ll want to decide how to manage this process.
Putting a benefit in place is great, but you must understand how it will be continuously managed and used to ensure your people get the most out of your program. Your options include:
Managing the process manually
If you choose this option, you’ll want to set up a process to track purchases, receipts, balances, approval, and paid perks, as well as rejections or ones that 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).
Keep in mind this process can be laborious and time intensive, and for companies over a certain size, it can be hard to keep up with the ongoing requests.
Choose software to help you manage it
While there are many business management and expense software programs out there, if you decide to extend your program beyond business expenses, stipend management software like Compt can help you save valuable time and keep your business tax-compliant.
With Compt, you can make life easier for you and your finance team with Compt — the simple, IRS-compliant way to manage nontaxable employee stipends. Unlike expense software, you’ll pay one predictable monthly fee based on headcount, not per report.
Other popular types of lifestyle stipends
A lifestyle stipend makes it possible for companies to offer more perks and benefit stipends with less money and ensure that they are personalized to meet the needs of their people (which leads to greater employee appreciation and benefits satisfaction).
Lifestyle Spending Account: Companies combine one or more of the stipends above to create a general Lifestyle Spending Account that gives employees even more flexibility to choose what matters to them.
Editor’s note: This article was originally published in 2020 and is updated regularly for accuracy, clarity, and relevance for our readers.
Offer Simple, Impactful Benefits
Skip the spreadsheets. Deliver the personalization employees want with stipends that are easy to use and easy to track.
Sarah Bedrick is the VP of Marketing at Compt. Prior to being cofounder of Compt, she worked at HubSpot for 6+ years, where she helped to build, scale, and grow the HubSpot Academy division.
She is obsessed with understanding what makes a company culture great, being a career and life coach to people in tech, and creating cherished memories with her husband and two young kids.
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Offer Simple, Impactful Benefits
Skip the spreadsheets. Deliver the personalization employees want with stipends that are easy to use and easy to track.
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