A health and wellness stipend is an employer-funded allowance that employees can use for eligible well-being expenses, such as gym memberships, fitness equipment, mental health apps, and other purchases covered by your stipend policy. Instead of limiting employees to a single wellness vendor or benefit, a wellness stipend gives them flexibility to choose what supports their individual needs.
And the best part? Setting up a wellness stipend doesn’t have to be a cumbersome project for HR. Compt’s free Stipend Policy Builder gives you a starting point for defining your program, while our experienced team guides you through setup and administration. You set the budget, eligible expenses, and employee eligibility rules, while Compt handles the administration.
This guide covers everything you need to know about designing and managing health and wellness stipends, including eligible expenses, funding benchmarks, tax considerations, program examples, and how to administer wellness benefits through Compt.
What is a health and wellness stipend?
Once a wellness stipend is in place, employees can use their allowance toward purchases covered by your policy. With Compt, they pay using their preferred payment method, submit a receipt, and receive approved reimbursements through payroll. You do not prefund employee accounts, and any unused allowances stay with your company.
You can offer wellness as a standalone stipend or include it as an eligible spending category within a broader Lifestyle Spending Account (LSA).
You might also hear wellness stipends called wellness allowances, wellness spending accounts, or wellness wallets. These terms are often used interchangeably, although the way the benefit works depends on the provider. Some use prepaid cards, while others, like Compt, use reimbursements.
Wellness stipends also aren’t the same as Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs), or Health Reimbursement Arrangements (HRAs). General wellness reimbursements are typically taxable fringe benefits, while tax-advantaged medical benefits follow different rules.
Give employees wellness choices without adding more admin work.
You set the budget, eligible expenses, and review rules. Employees choose qualifying purchases from the vendors they prefer, while Compt simplifies claim submission, review, reimbursements through payroll, and reporting.
Overall benefits of health and wellness stipends
Why are employers investing in wellness stipends? Because employees want support for their well-being, but not everyone needs the same kind of support.
According to WTW’s 2026 employee benefits research, 79% of employees want their employers to take an active or supporting role in their well-being, and the Employee Benefit Research Institute’s 2025 Workplace Wellness Survey found that 34% of workers want more flexibility to choose their own benefits.
And the popularity of wellness stipends to meet these needs continues to grow: Compt’s 2026 Midyear Lifestyle Benefits Benchmark Report found that 42% of our customers offered wellness stipends in the first half of 2026, compared with 37% in 2025.
Employee benefits of health and wellness stipends
Employees can choose wellness support that fits their lives.
Not everyone has the same approach to wellness. For some employees, it might mean a Peloton subscription or kickboxing classes. Others may focus on goals like spending more time outdoors, practicing mindfulness, or exploring ways to manage stress. (Check out our example ways to use wellness stipends for more ideas!)
Traditional wellness benefits often revolve around specific vendors or activities that don’t appeal to everyone. What, for example, is a consistent daily dog walker going to do with a national gym membership? A wellness stipend gives employees more control over how they use their benefits, as long as their purchases fall within your company’s policy.
“If you get your health and wellness from gardening, meditating, or hiking … this means different things to different people.”
— Kevin Sullivan, former Global Benefits Manager, Quickbase (a Compt customer)
Wellness stipends evolve alongside your people.
Do you have the same wellness goals or habits you did 10 years ago? Probably not. The same goes for your employees.
Someone training for a marathon today might focus on stress management or nutrition next year. An employee caring for a family member is likely to have completely different wellness priorities than another with more time to devote to fitness.
Cost is an important consideration, too. According to WTW’s 2026 Global Benefits Attitudes Survey, only 36% of U.S. employees reported feeling financially secure, the lowest level in seven years.
And while a wellness stipend won’t replace health insurance or resolve major financial pressures, it will offset eligible expenses employees might otherwise pay for entirely themselves. When you choose Compt, employees pay upfront and receive approved reimbursements through payroll.
Employer benefits of health and wellness stipends
Wellness stipends support employee retention.
Employees want to know their employers care about their well-being, and that perception often affects whether they stay. According to Gallup’s employee well-being research, employees who strongly agree that their organization cares about their overall well-being are 54% less likely to be looking for another job.
Offering a wellness stipend may not automatically improve retention, but a flexible benefit is one way to demonstrate that your priority is to invest in employees as individuals rather than assuming everyone has the same needs.
When your wellness program accommodates different interests, life stages, and circumstances, more employees have an opportunity to find the benefit useful and come to value it.
Health and wellness stipends make benefits spending easier to control.
Maintaining separate vendor contracts for fitness, mindfulness, nutrition, and other wellness services puts HR in the position of managing multiple programs while Finance struggles to get a complete picture of spending.
Employers are paying closer attention to that complexity. WTW’s 2026 Wellbeing Diagnostic Survey found that 64% of surveyed employers were looking to streamline vendor partnerships, while 59% were focused on increasing cost oversight.
A wellness stipend or all-inclusive LSA with Compt gives you the option to consolidate eligible expenses under one policy and budget. Rather than committing funds to multiple programs that employees may or may not use, you establish an allowance and let employees choose qualifying purchases.
As Compt CEO Amy Spurling explains in her comparison of benefits debit cards and reimbursement:
“When a company moves money into a vendor-managed account, they’re giving up control over when and how they can access it.”
That’s the financial advantage of Compt’s reimbursement-based approach. You commit a benefits budget without transferring the full amount into prefunded employee accounts. Employees use their preferred payment methods, your company pays approved reimbursements through payroll, and unused allowances stay with your business.
Flexible programs can drive higher utilization (if that’s your goal).
If you’re offering a wellness stipend to support everyday expenses like fitness memberships, meditation apps, and other eligible wellness purchases, high utilization is generally a good sign. It suggests employees are finding opportunities to use the benefit.
But not every stipend is designed for frequent use. As Compt’s Head of Customer Success, Mary Migiano, explained in a podcast episode about our 2026 employee benefits benchmarks, some employers prioritize maximum utilization, while others offer targeted benefits that employees only need occasionally.
Take an out-of-state care stipend. If no employees access that benefit during a given year, 0% utilization doesn’t necessarily mean the program failed. The benefit was available if your employees needed it, and it’s a good thing they didn’t.
Program structure is an important consideration, too. Our 2026 Annual Lifestyle Benefits Benchmark Report found that wellness utilization reached 86% when included in a Lifestyle Spending Account (LSA), compared with 62% for standalone wellness stipends, based on full-year 2025 customer data.
Utilization measures how much of the available funding employees actually spend, not whether they participated. The difference suggests all-inclusive LSA programs may give employees more opportunities to use their allowances, but it doesn’t mean standalone wellness stipends are unsuccessful.
The important thing is to define what success looks like for your organization and people before evaluating the numbers. If your goal is to make wellness support relevant to as many employees as possible, an all-inclusive LSA is worth considering. If you’re offering targeted support for a specific need, you may choose a different path. Compt offers both.
And whatever structure you choose, reviewing utilization alongside participation and employee feedback can tell you whether your program is working as intended.
Compt makes wellness stipends easier to administer.
Giving employees more flexibility shouldn’t mean handing HR a whole second job. That’s why Compt is designed to handle the repetitive tasks involved in running wellness stipends, while keeping your team in control of program policies and exceptions.
And you don’t have to figure it all out yourself. Our Customer Success team guides you through implementation, including program design, eligibility settings, HRIS integrations, and payroll configuration. Once you’re live, Compt automatically syncs employee information from your HRIS, so changes in department, location, or employment status don’t require constant spreadsheet updates.
Compt also uses AI to reduce work on both sides of the reimbursement process:
- For your employees, AI-assisted Claim Autofill reads receipts and populates expense details, while Policy Checker flags potential eligibility issues before they even submit their claims.
- For administrators, AI-assisted Claim Reviewer compares submissions against receipts and your written policy, providing recommendations and supporting reasoning.
- You can enable automatic approval for qualifying high-confidence claims. AI never automatically rejects an employee’s claim, however; uncertain submissions and rejection recommendations always go to a person for review.
Behind the scenes, Compt applies your configured eligibility and tax-treatment rules, maintains records of receipts and approvals, and generates payroll-ready reimbursement reports that match your existing payroll workflow. That means you spend less time auditing receipts, reconciling reimbursements, and preparing payroll files.
Need a closer look at how your program is performing? ComptGPT lets HR and Finance ask questions about stipend spending, utilization, and other benefits data in plain language, then generates answers and charts directly inside Compt. (Want to use your data outside of Compt? Our MCP connector lets you do that, too!)
And your team isn’t on its own after launch. Compt provides ongoing customer support and employee assistance, including an AI-powered support assistant that can escalate questions to our human support team. Your employees and administrators also have access to a self-serve Compt knowledge base and video guides (so HR can field fewer questions about eligible expenses or reimbursement timing, hooray!).
The payoff? Compt customers report spending as little as 10 minutes per month on stipend administration after proper setup, although the time varies by program size and complexity. Your employees get streamlined, personalized wellness benefits without creating more work for you.
“Compt’s functionality was there, price point was there, usability was there. It was an easy yes.”
— Stephanie French, Sr. Benefits & Compensation Manager, Jellyvision (a Compt customer)
15 companies offering wellness stipends in 2026
What does a wellness stipend look like in the real world? There’s no single approach. Some employers offer dedicated fitness and mental health allowances, while others include wellness expenses in broader flexible benefits programs.
The companies below illustrate different funding amounts, eligible expenses, and program designs. Keep in mind that benefit amounts and eligibility can vary by location, employee classification, and company policy, and that these benefits can change without notice.
Some companies offering health and wellness stipends include:
| Company | Wellness stipend or benefit | Source |
|---|---|---|
| Deloitte | Up to $1,000/year. U.S. well-being subsidy reimbursing eligible expenses such as fitness memberships, equipment, hobbies, and other activities that support well-being. | Deloitte benefits guide |
| Microsoft | $1,500/year for eligible corporate employees. Perks+ covers physical, mental, emotional, and financial well-being. Other employee groups have different allowances. | Microsoft Perks+ |
| Meta | $2,000/year. A flexible employee benefit that includes health and wellness expenses alongside other eligible purchases, according to May 2026 employee reporting. | WIRED, May 2026 |
| EY (Ernst & Young) | EY’s Extraordinary You Funds included up to $1,000 in wellness reimbursement in its 2024 Impact Report, covering eligible activities, experiences, vacation expenses, fitness equipment, and meal delivery services. EY currently advertises up to $3,500 annually across its broader Extraordinary You benefits offering. | EY US 2024 Impact Report, p. 17 |
| Adobe | Up to $600/year. Wellbeing Reimbursement Program covering eligible physical, mental, and financial wellness expenses for employees and eligible dependents. | Adobe benefits |
| Qualtrics | $300/quarter ($1,200/year). Wellness reimbursement for employees and their families, with local-currency equivalents in eligible regions. | Qualtrics U.S. benefits |
| Johnson & Johnson | Up to $500/year, adjusted by location. Global well-being reimbursement covering fitness, nutrition, mental wellness, recovery, equipment, and financial well-being. | J&J reimbursement program |
| Runway | $600/year wellness stipend covering eligible mental and physical health expenses, including therapy sessions and gym memberships. | Runway careers and benefits |
| Bulletproof | $125/month wellness stipend offered as part of the company’s employee health benefits. | Bulletproof careers |
| Availity | Up to $250/year. Health and Fitness Reimbursement Program covering gyms, fitness classes, equipment, fitness apps, and certain ergonomic purchases. | Availity careers |
| Alliant Credit Union | Up to $35/month. Noncumulative wellness reimbursement for gym memberships, fitness activities, and other eligible wellness services. | Alliant employee benefits |
| Quickbase (Compt customer) | $1,250/year. A flexible wellness benefit covering a broad range of employee-selected expenses, including fitness, gardening, travel, and pet care. | Quickbase case study |
| ButterflyMX (Compt customer) | $300/quarter, adjusted for local purchasing power. Self-Care Stipend covering wellness, food, fitness, travel, pet care, and other lifestyle expenses across its global workforce. | ButterflyMX case study |
| Carrot Fertility (Compt customer) | Flexible productivity stipend that employees can use for expenses such as fitness memberships, dog walking, and coffee, alongside separate employee stipends. | Carrot Fertility case study |
| Jellyvision (Compt customer) | Quarterly stipend program administered through Compt, including wellness expenses and a dedicated therapy allowance. | Jellyvision case study |
These examples show just how much wellness stipend budgets and eligible expenses can vary. For a planning benchmark, Compt’s 2026 Midyear Lifestyle Benefits Benchmark Report found that the median annual wellness stipend among Compt customers was $600 per employee in the first half of 2026.
Your ideal budget will depend on the expenses you want to cover, your workforce, and what you want the program to accomplish.
Which expenses are reimbursable in a wellness stipend?
A wellness stipend can reimburse a wide range of expenses that support employees’ well-being, as long as they’re covered by your company’s policy and the program is structured appropriately.
And gym memberships are just the beginning! Depending on how you define wellness for your workforce, eligible expenses might include:
- Fitness and movement: Gym memberships, personal training, yoga, Pilates, kickboxing, fitness classes, running shoes, workout apparel, and fitness apps or programs.
- Fitness equipment and wearables: Treadmills, stationary bikes, weights, yoga mats, foam rollers, fitness trackers, and wearable devices like Fitbit, WHOOP, or Oura Ring.
- Mental and emotional well-being: Meditation apps, mindfulness courses, stress-management programs, wellness coaching, guided journals, breathwork classes, and other self-care resources.
- Nutrition and healthy eating: Groceries, meal kits, meal-delivery services, nutrition coaching, cooking classes, cookbooks, and kitchen equipment such as juicers.
- Sleep and recovery: Massage therapy, sleep-tracking apps, weighted blankets, blackout curtains, white-noise machines, and other recovery or relaxation products.
- Everyday wellness and self-care: Vitamins and supplements, aromatherapy products, herbal teas, wellness books, eye masks, and other eligible self-care purchases.
- Financial wellness: Financial planning and coaching sessions, budgeting and savings apps, financial literacy courses, debt-management tools, credit monitoring services, and other resources that support employees’ financial well-being.
These are examples, not a universal list of approved expenses. Your stipend policy determines which purchases qualify, what documentation employees need to submit, and whether certain items or price points require additional review.
What do employees actually spend their wellness stipends on?
While gym memberships remain popular, employees use their wellness benefits for much more than fitness.
According to Compt’s 2026 Annual Lifestyle Benefits Benchmark Report, fitness memberships accounted for 43% of wellness stipend transactions in 2025. The remaining transactions covered other eligible expenses, including fitness equipment, nutrition, mental health support, apparel, and relaxation.
What about medical treatments and prescriptions?
What about medical treatments and prescriptions?
Employers are also exploring support for expenses such as physical therapy, chiropractic care, acupuncture, mental health treatment, diagnostic screenings, GLP-1 medications and other weight-management expenses, hormone-replacement therapy (HRT), and peptide treatments.
Compt gives employers flexible options for supporting weight management. You can incorporate eligible expenses into an existing wellness stipend or LSA, or create a dedicated weight management stipend to offer more targeted support. Depending on how you structure the program, eligible purchases could include GLP-1 prescriptions, fitness memberships, nutrition coaching, and other weight-management expenses.
You control the budget, eligible expenses, and approval rules, while Compt handles the reimbursement workflow, applies your configured policies, and prepares payroll-ready reporting. Employees can choose qualifying purchases from their preferred providers without requiring HR to manage separate vendor relationships.
Medical treatments and prescription reimbursements do require additional consideration. A taxable stipend isn’t automatically exempt from applicable health plan requirements, so work with your tax and benefits advisors to determine the appropriate program structure and eligible expenses. Compt’s team can then help you configure and administer the program according to those decisions.
Learn more about ways to use a wellness stipend, or, if you’re ready to get started, request a demo with Compt.
Groceries as a wellness benefit
For many people, taking care of their well-being starts in the grocery aisle. And with food costs continuing to strain households across the U.S. and the world, a grocery stipend offers a practical way to support your employees’ everyday needs.
According to the USDA’s September 2026 Thrifty Food Plan, feeding a family of four with two school-age children costs approximately $1,024 per month (assuming meals and snacks are prepared at home). Meanwhile, an October 2026 Pew Research Center survey found that 73% of U.S. adults were very concerned about the price of food and consumer goods.
And we’re seeing employees use their stipends accordingly. Compt’s 2026 Annual Lifestyle Benefits Benchmark Report found that nearly 1 in 10 stipend dollars went to grocery retailers in 2025, across all stipend categories and programs.
One employee put it simply in our article about grocery stipends:
“With the high cost of groceries, it’s helped to almost cover one weekly trip.”
You can include groceries and nutrition-related purchases in a standalone wellness stipend, offer a dedicated food allowance, or make food one of several eligible categories in an all-inclusive LSA.
And with Compt’s reimbursement model, employees can shop at the grocery stores and retailers they already use, rather than being limited to specific vendors or a prepaid marketplace. As with our other stipends, you control what’s eligible, and employees choose what works for their households.
Real employee quotes about the impact of wellness stipends
What do wellness stipends actually mean to the employees who use them?
We asked Compt users to share how their benefits support their everyday lives. Their responses show just how personal wellness stipends can be, whether they’re using their benefit to make fitness activities more affordable, build healthier habits, or get support for expenses they might otherwise struggle to cover.
Here are some of their responses, in their own words:
Making wellness more affordable
- “It has allowed me to participate in regular exercise programs that I normally would not have attended due to the cost.”
- “Compt helps me to make sure I always have time and money put aside for my health and well-being regardless of pay.”
- “Without it, I wouldn’t have been able to afford a gym membership! Ty.”
- “Thank you. I am able to afford a membership to the YMCA for my family.”
- “I love being able to use my stipend to help cover my gym costs.”
- “Lightens the burden of paying for exercise — wonderful.”
- “It has been great to be able to supplement my income for well-being for myself and to be reimbursed for fitness.”
- “This extra financial support helps me stay healthy.”
Building healthier habits and staying motivated
- “I am able to buy a yoga punch pass. Yoga is my antidepressant :)”
- “It has helped me do my light strength training and do exercises to benefit my circulation.”
- “I exercise regularly but this gives you extra motivation to go a little more!!”
- “It encourages me to keep going to pilates which helps my body and spirit.”
- “It has enabled me to finally start losing weight!”
- “Just began using this for my yoga membership.”
- “It’s that extra little push to keep the wellness aspect of our lives moving forward.”
- “I regularly exercise at the gym with the help of our Compt stipend.”
- “I’ve been able to work out and enjoy life WAAAAAY more!”
- “My daily work requires a lot of physical activity, so I’m able to stay focused and physically active.”
Choosing what wellness looks like for them
- “I’m able to obtain protein shakes and supplements that contribute to my overall health, wellness, and weight loss/maintenance.”
- “I am acquiring a First Aid certificate.”
- “It’s been helpful in buying running and/or tennis shoes for workouts.”
- “My quarterly massage is very rewarding.”
- “I have been able to use it toward my gym membership. I also got a walking pad, and these have helped my overall well-being.”
- “I got myself a Fitbit!”
Getting support for medical and therapeutic expenses
- “It is a huge relief to have help purchasing a necessary medical device that is not covered by insurance.”
- “Trying to get caught up on my medical expenses is very difficult. I pay almost $200 a month. The stipends do help out.”
- “I was able to pay my copayments for my physical therapy. Thank you.”
- “Helps pay my medical bills.”
- “I use my chiropractor/massage visits for my reimbursements. To get assistance with these treatments is wonderful!”
- “I am struggling with sciatica pain and the benefit helps me pay for the chiropractor. Thank you!”
Note: These experiences reflect different employer-defined programs administered through Compt. Eligible expenses vary by program, and medical care reimbursements may require additional tax or regulatory considerations.
What can employers take away from these experiences? A few things stand out:
- Affordability influences participation. Several employees explicitly say their stipends make fitness memberships, classes, and other wellness activities more financially accessible.
- Flexibility makes benefits relevant to more people. Employees describe using their allowances for different needs, including fitness, recovery, equipment, and personal wellness routines. A single vendor or activity wouldn’t necessarily accommodate all those preferences.
- Stipends can encourage consistency. Employees report using their benefits to maintain routines, stay motivated, and continue activities they value. Wellness funding can reinforce existing habits as well as support new ones.
- Eligibility matters as much as funding. Some employees describe medical expenses, while others use their benefits for general wellness purchases. Employers need clear stipend policies and benefit structures that reflect the expenses they intend to support.
With Compt’s reimbursement-first approach, you define what’s eligible and employees choose how to use their allowances within those rules. You maintain control over your program without restricting employees to a predetermined list of vendors or wellness activities.
Is a wellness stipend taxable?
Yes. In most cases, wellness stipends are taxable fringe benefits in the United States. So reimbursements for expenses such as gym memberships, fitness equipment, meditation apps, and other general wellness purchases are typically treated as additional employee compensation.
According to IRS Publication 15-B, employer-provided fringe benefits are taxable unless a specific exclusion applies. For taxable wellness stipends, that generally means:
- Employees owe applicable federal income taxes and Social Security and Medicare taxes.
- Employers are responsible for applicable payroll taxes, withholding, and reporting.
- Taxable reimbursements are included in employees’ Form W-2 wages, generally in Box 1 and, where applicable, Boxes 3 and 5.
Here’s an example: Let’s say you offer employees a $100 monthly wellness stipend. One employee purchases a $100 gym membership and submits the receipt for reimbursement.
There are two common ways to account for the taxes:
| Approach | What happens |
|---|---|
| Employee pays the taxes. | The $100 reimbursement is treated as taxable compensation. Applicable taxes are accounted for through payroll, reducing the employee’s overall take-home pay. |
| Employer grosses up the benefit. | Your company pays additional compensation to offset estimated employee taxes, increasing your cost so the employee receives approximately the intended net benefit. |
The actual tax impact depends on the employee’s circumstances, current applicable tax rates, and your payroll configuration. If you choose to gross up reimbursements, you’ll also need to account for taxes on the additional compensation.
Are any wellness benefits tax-free?
Some employer-provided wellness-related benefits can qualify for tax exclusions, but only when they meet specific requirements.
Examples include certain qualifying medical expenses reimbursed through a properly structured health plan or Health Reimbursement Arrangement (HRA), and access to eligible employer-operated athletic facilities. Certain occasional, low-value noncash benefits may also qualify as de minimis fringe benefits.
These exceptions don’t generally apply to recurring cash allowances or reimbursements for everyday wellness purchases.
There’s also an important distinction between general wellness and medical care. Reimbursing prescription medications, medical treatments, or other qualifying medical expenses can introduce group health plan requirements, even when the reimbursement is taxable.
How does Compt handle wellness stipend taxes?
Offering a tax-compliant wellness stipend doesn’t need to mean creating more administrative work for HR and Finance. That’s where Compt stands apart.
Compt is built to manage the complexities of stipend reimbursements, including eligibility, tax treatment, and payroll reporting. You define your program’s rules, and our experienced Customer Success team works with you to configure them correctly for your organization.
Once your program is running, Compt consistently applies your configured taxable and nontaxable rules to reimbursement claims, maintains receipts and approval records, and generates payroll-ready reports with the appropriate tax classifications and pay codes. Your payroll team gets the information it needs without manually classifying every expense or reconciling multiple spreadsheets.
The result? A flexible wellness benefit for employees, with the policy controls, tax-treatment configuration, and payroll infrastructure your HR and Finance teams need to administer it confidently.
See how Compt makes wellness stipend administration easier. Request a Compt demo today.
How to create a wellness stipend with Compt
Ready to offer your employees a wellness stipend? With Compt, you don’t have to build the program or figure out the technical details on your own.
Our Customer Success team guides you through program design, configuration, integrations, and employee communications, and remains available to answer questions, evaluate whether your program is meeting your established goals, and make adjustments after launch.
Most Compt customers are up and running within a month, depending on their internal requirements and approval timelines.
Here’s how to get started:
1. Define your goals and create your wellness stipend policy.
First, think about what you want your wellness stipend to accomplish. Are you replacing a gym membership benefit, expanding your mental health offerings, or giving employees more flexibility to support their overall well-being?
Then give your stipend a name and description. You can keep it simple with “Wellness Stipend” or get creative with something like “Feel-Good Fund.” It’s your program!
Not sure where to start with the policy? Compt’s free Stipend Policy Builder walks you through the decisions, including eligible expenses, exclusions, receipt requirements, and tax considerations. It uses Compt’s established policy rules as a starting point and generates an editable policy, employee guide, and communication templates.
2. Set your budget, funding frequency, and employee eligibility.
How much do you want to give employees, and how often should their allowance become available?
Compt supports monthly, quarterly, semiannual, and annual funding, with options to provide the full allowance upfront or let balances accrue over time. You can also configure whether unused allowances carry forward or expire.
You decide who’s eligible, too. Maybe every employee receives the same allowance. Or perhaps your program needs different funding amounts based on location, department, or employment type.
With Compt’s custom eligibility rules, you can configure those distinctions without managing a separate spreadsheet. When your HRIS is connected, employee changes can update their stipend eligibility automatically.
3. Choose which wellness expenses your stipend covers.
Your health and wellness stipend is designed to support your employees’ well-being, so you’ll definitely want to select the wellness category when you set up your benefit. However, many companies expand their offerings by adding categories like food, family, and Treat Yourself, giving employees more options to support their well-being at different stages of life. Adding categories doesn’t mean you have to increase your budget; you still control the allowance amount and eligible expenses.
If you want to make your benefits budget go even further, consider offering an all-inclusive Lifestyle Spending Account (LSA). With an LSA, you can combine wellness with other categories, giving employees the flexibility to choose benefits that match their current needs, whether that’s fitness, caregiving, pet care, student loan repayment, or something else.
By offering a wider variety of spending categories, you can accommodate more employee needs within a single benefits program without managing separate stipends for every type of expense.
4. Connect your HRIS and payroll systems.
Here’s where Compt takes much of the technical work off your plate.
Our Customer Success team works with your HR, IT, and Payroll teams to configure your account, connect your HRIS, set up single sign-on (if applicable), and establish your reimbursement reporting workflow.
Compt syncs employee information with supported HRIS integrations, applies your configured eligibility and tax-treatment rules, and prepares approved reimbursements for payroll. ADP customers can use direct payroll posting, while other payroll systems can receive customized payroll-ready files.
With Compt, you don’t have to manually maintain employee eligibility lists or build a new reimbursement spreadsheet each pay period.
5. Invite employees and launch your wellness stipend.
Once your program is configured and tested, you’re ready to invite your employees!
Compt provides launch materials and employee FAQs that you can customize for your company. Share your wellness stipend policy, examples of eligible expenses, and reimbursement instructions through email, Slack, your intranet, or wherever your people look for benefits information.
When employees activate their Compt accounts, they can view their available allowances, make eligible purchases, and submit receipts for reimbursement. AI-assisted Claim Autofill makes submission easier, and automated reminders keep the benefit top of mind so no one misses out.
After launch, Compt’s reporting tools let you monitor participation, spending, and utilization so you can see how employees are using their wellness benefits and adjust your program as their needs evolve.
Other types of stipends Compt offers
Health and wellness stipends aren’t the only way to support your employees with flexible benefits. With Compt, you can offer different stipend programs independently or combine multiple categories into an all-inclusive Lifestyle Spending Account (LSA), giving employees more flexibility to choose the benefits that matter to them.
So, what other stipends are gaining popularity? Here’s a breakdown of some of the most common:
- AI tools stipend
- Cell phone reimbursement stipend
- Charitable giving stipend
- Commuter stipend
- Equipment stipend
- Family and caregiving stipend
- Internet stipend
- Learning and development stipend
- Meal or food stipend
- Pet care stipend
- Productivity stipend
- Remote work stipend
- Student loan assistance
- Swag stipend
- Travel and experience stipends
- Tuition reimbursement stipend
What else is included with Compt Lifestyle Benefits?
Here’s the best part: When you choose Compt for wellness stipends, you’re getting much more than wellness stipend software.
Our Lifestyle Benefits offering includes:
- Unlimited stipend and LSA programs. Offer recurring wellness stipends, professional development allowances, family benefits, and other programs with different budgets, eligibility rules, and funding schedules. There’s no additional platform fee each time you introduce a new stipend.
- Rewards and recognition. Celebrate birthdays, anniversaries, milestones, and employee achievements with spot bonuses, monetary recognition, or e-thanks shoutouts. You can also enable peer-to-peer recognition, all within Compt.
- Employee Discounts. Give employees access to more than 15,000 discounts from over 1,000 brands. Employees can use eligible discounts alongside their stipends, stretching their allowances further without adding another benefits vendor.
- Company Swag Store. Let employees choose branded merchandise, produced on demand, without requiring your team to manage inventory, bulk orders, or another swag platform.
All four capabilities are included in Compt’s core Lifestyle Benefits software offering, so you can expand your Total Rewards programs without adding a separate subscription for each one. Your actual stipend and recognition reimbursement spending remains separate from the software fee.
Compt gives you one platform and more ways to support your people.
Run wellness stipends, flexible LSAs, employee recognition, discounts, and company swag through Compt, without adding more administrative work or separate software subscriptions. HR and Finance can manage policies, budgets, reimbursements, and reporting in one place instead of juggling multiple vendors and disconnected systems.
See for yourself. Request your Compt demo.
FAQ: Health and wellness stipends
A wellness wallet is an employer-funded pool of money employees can use for eligible wellness expenses. It’s often used as a modern label for a wellness stipend or wellness allowance, usually administered through a platform that supports categories, receipt requirements, and reporting.
What is a wellness account for employees?
A wellness account for employees is an employer-sponsored benefit that provides funds employees can use for eligible well-being expenses based on the employer’s policy. It’s typically not a pre-tax medical account like an HSA or FSA.
In most cases, wellness accounts are treated as taxable, post-tax benefits, with expenses reimbursed and reported through payroll based on the program’s rules and documentation.
Is a wellness stipend considered a fringe benefit?
Yes. A wellness stipend is generally treated as a fringe benefit because it’s employer-provided compensation outside base wages, typically delivered as a taxable reimbursement.
Does IRS consider stipends income?
Generally, yes. The IRS treats employee stipends as taxable compensation unless they qualify for a specific tax exclusion. Most wellness stipends are taxable because they reimburse personal expenses such as gym memberships, fitness equipment, and wellness apps.
Certain work-related reimbursements, qualified transportation benefits, and educational assistance may be nontaxable when the applicable IRS requirements are met.
An accountable plan can allow qualifying business-expense reimbursements to be excluded from wages, but it doesn’t automatically make personal wellness stipends tax-free.
Are health stipends reported on W-2?
Yes. When a stipend is taxable, it’s typically reported on the employee’s Form W-2 as wages and is subject to state and federal tax withholding.
Is a wellness stipend taxable?
Yes. In most cases, health and wellness stipends are taxable fringe benefits under IRS rules because they reimburse personal expenses.
Compt applies your organization’s configured tax-treatment rules to approved reimbursements and generates payroll reports that distinguish taxable and nontaxable amounts. Your payroll system handles applicable withholding and wage reporting, reducing the manual work for HR and Finance.
For more detail, read our guide to taxable wellness stipends.
Do wellness stipends affect HSA or FSA eligibility?
A general taxable wellness stipend limited to nonmedical expenses typically doesn’t affect an employee’s HSA eligibility. However, the answer can change if the arrangement reimburses medical care or otherwise provides health coverage.
HSA eligibility depends on the employee’s health coverage and whether they have disqualifying coverage, not simply on whether a reimbursement is treated as taxable. Similarly, a separate nonmedical wellness stipend generally doesn’t affect health FSA eligibility, although the same expense cannot be reimbursed twice.
Review any wellness program involving medical expenses with your benefits and tax advisors.
Can wellness stipends be paired with an ICHRA?
Yes. Employers can offer a separate taxable wellness stipend or Lifestyle Spending Account (LSA) alongside an Individual Coverage Health Reimbursement Arrangement (ICHRA). We recommend you work with your benefits advisors to structure the programs appropriately.
The ICHRA can support eligible health insurance and medical expenses, while the wellness stipend can cover nonmedical expenses such as fitness memberships, equipment, and other lifestyle purchases.
A nonmedical wellness stipend generally doesn’t independently affect HSA eligibility. However, an employee’s HSA eligibility also depends on their health insurance and ICHRA design. For example, an ICHRA that reimburses medical expenses beyond premiums may create disqualifying coverage.
How can we avoid ERISA issues with a wellness stipend?
To reduce ERISA risk, clearly define your wellness stipend’s eligible expenses, how reimbursements work, and whether the program covers medical care.
A taxable stipend limited to general wellness and lifestyle purchases typically raises different considerations than an arrangement that reimburses medical treatment, prescription medications, or other health care expenses. Making a reimbursement taxable doesn’t automatically exempt a medical benefit from ERISA or other applicable health plan requirements.
If you want to cover medical expenses, work with your benefits counsel to determine the best way to meet your goals and maintain compliance.
Which expenses are reimbursable in a wellness stipend?
Wellness stipends can cover a wide range of physical, mental, financial, and everyday well-being expenses, depending on your employer’s policy. Common examples include gym memberships, fitness classes, exercise equipment, meditation apps, wellness coaching, groceries, sleep products, and financial wellness resources.
Medical treatments, prescription medications, and therapeutic services may require a different benefit structure or additional regulatory considerations. Your company’s policy determines which purchases qualify and what documentation employees need to provide.
See the full list of eligible wellness expenses above for more examples.
Can employees use wellness stipends for GLP-1 medications or weight-management programs?
Yes, employers can support weight-management activities through appropriately designed benefits. That said, GLP-1 prescriptions such as Wegovy, Zepbound, and Ozempic require additional consideration because they’re medical treatments.
Reimbursing prescription medications through a general taxable wellness stipend may trigger health-plan requirements, even if employees pay income tax on the reimbursement. Work with your benefits and legal advisors to determine the appropriate structure before including prescription medications or medical treatments in your policy.
Compt also offers resources on designing a weight-management stipend, including nonmedical wellness expenses and program considerations.
How do wellness stipends compare to Lifestyle Spending Accounts (LSAs)?
A wellness stipend focuses on employee health and well-being, while a Lifestyle Spending Account (LSA) can support a wide range of personal and professional needs.
With Compt, employers can choose from more than 30 stipend categories, including wellness, food, family, professional development, travel, and pet care. You decide which categories to include, how much funding to offer, and who is eligible.
Some companies start with a standalone wellness stipend and later expand into an all-inclusive LSA to give employees more choice within a single allowance. Both options are available through Compt.
What’s the average participation rate for wellness stipends?
Compt’s 2026 Annual Lifestyle Benefits Benchmark Report found an 85% participation rate for wellness stipends in 2025, with employees using an average of 70% of available wellness funding.
Across all Compt programs, employee activation reached 95%, and participation among active users reached 93%.
Program design also affects how much funding employees use. Wellness utilization reached 86% when included in an LSA, compared with 62% for standalone wellness stipends. Participation and utilization measure different things, so employers should evaluate both against their program’s goals.
How do you calculate the right budget for wellness stipends?
Start with the expenses you want to cover, your eligible employee population, and how much support you want to provide. Compt’s 2026 Midyear Lifestyle Benefits Benchmark Report found a median annual wellness stipend of $600 per employee across customer programs in the first half of 2026.
Multiply your proposed annual allowance by the number of eligible employees to establish your maximum annual funding commitment. Then model expected reimbursement spending, using utilization benchmarks and your program’s design to inform your assumptions. With Compt’s reimbursement model, unused allowances remain with your company rather than sitting in prefunded accounts.
See our guide to designing health and wellness stipends for more details.
How do wellness stipends help during budget cuts or benefit reductions?
Wellness stipends can give employers more control over benefits spending while preserving flexibility for employees.
Instead of maintaining separate contracts for multiple wellness vendors, you can consolidate eligible expenses under a single stipend or LSA with a defined budget. This can reduce vendor costs and administrative overhead, depending on the programs you’re replacing.
With Compt’s reimbursement-based model, you don’t have to prefund employee accounts. Your company pays approved reimbursements, and unused allowances remain with your business. That gives Finance more control over funding while allowing employees to choose the wellness purchases that fit their needs.
How can HR measure ROI on wellness stipends?
Start by defining what success looks like for your program. Are you trying to increase participation, support employee well-being, reduce administrative work, or consolidate benefits spending?
Then track metrics such as participation, utilization, reimbursement spending, employee feedback, and the time HR spends administering benefits. Compt’s reporting tools let you review spending patterns, utilization, and participation over time. You can compare these results with employee engagement, retention, and other business metrics to evaluate whether your program is meeting its goals.
Keep in mind that changes in retention or engagement may have multiple causes. Use these measures to evaluate the program’s contribution rather than assuming the stipend alone caused an improvement.
For more details, see our dedicated post on lifestyle benefits ROI.
How should we communicate wellness stipends to employees? What are best practices for rolling out a lifestyle stipend, like health and wellness?
Effective internal communication will determine your stipend or LSA program’s success. Announce the benefit early and often. Use email, Slack, or intranet posts to explain eligibility and examples of approved expenses. Compt customers often add reminders in Slack or run mini campaigns around “How will you use your stipend this quarter?” to drive engagement.
How to offer a wellness stipend to employees? What are steps to launch a wellness stipend in 30 days?
To launch a wellness stipend with Compt, define your goals, create your policy, choose your budget and funding cadence, configure eligibility and approved expenses, connect your HRIS and payroll workflows, and invite employees.
Compt’s Customer Success team guides you through the setup process, including program configuration, testing, and employee communications. Most customers launch within a month, depending on their internal requirements.
You can start with Compt’s free Stipend Policy Builder to create a draft policy and employee communication materials.
Do wellness stipends work globally?
Yes! Wellness stipends can support international employees, and Compt’s customer data shows that companies are using them across global workforces.
According to our 2026 Midyear Lifestyle Benefits Benchmark Report, roughly 20% of Compt customers supported international employees in the first half of 2026. Among customers with international programs, 42% offered wellness benefits, up from 33% in 2025, while all-inclusive LSA adoption increased from 57% to 61%.
One of Compt’s biggest advantages for global companies is that you can provide consistent access to benefits without restricting employees to the same vendors or purchases in every country. You can tailor funding, eligibility, and eligible expenses to local needs and purchasing power while employees choose qualifying purchases from their preferred vendors. For example, ButterflyMX uses Compt to administer a global Self-Care Stipend with funding adjusted for local purchasing power.
Tax treatment and benefit requirements vary by country, so global programs still need to account for applicable local laws. Compt supports configurable program rules and reimbursement reporting, while employers work with their tax and benefits advisors to determine the appropriate requirements for each location.
Can I use Compt to offer a wellness stipend?
Yes! Compt makes it easy to design, launch, and manage a flexible wellness stipend with the policy controls, configured tax treatment, and payroll-ready reporting HR and Finance need.
You set the budget, funding frequency, eligible expenses, and employee eligibility rules. Employees choose qualifying purchases from their preferred vendors and submit receipts for reimbursement through payroll.
Unlike traditional vendor-restricted wellness programs, Compt gives employees flexibility while keeping your organization in control of budgets, policies, and approvals. Our Customer Success team guides you through implementation, and features like AI-assisted claim review, HRIS integrations, and payroll-ready reporting reduce the ongoing administrative workload.
And the approach works for Compt customers. Quickbase, for example, achieved 96% platform adoption, with employees using more than 1,300 vendors for their benefits.
Wellness is just the beginning, too. Compt Lifestyle Benefits includes unlimited stipend programs, rewards and recognition, employee discounts, and a company swag store, all within one offering.
What are the best platforms for managing employee wellness stipends?
Compt is particularly well suited for employers that want flexible, reimbursement-based wellness benefits without prefunding employee accounts. Employees can choose eligible purchases from their preferred vendors, while employers control budgets, policies, approvals, and payroll reporting. When comparing providers, look for configurable eligibility rules, clear tax-treatment reporting, employee support, and the ability to expand beyond wellness into other benefits.
Ultimately, the best wellness stipend platform depends on how you want to fund benefits, which expenses employees can claim, and how your HR and Finance teams manage reimbursements.
How can we combine our wellness, remote-work, and learning benefits into one platform?
You can combine wellness, remote-work, and learning benefits in one Lifestyle Spending Account (LSA) or manage them as separate stipend programs through Compt.
Your organization can set different budgets, funding schedules, eligibility rules, and eligible expenses for each program. Compt’s Lifestyle Benefits offering includes unlimited stipend programs, so you don’t need a separate software subscription for every allowance. The same offering also includes rewards and recognition, employee discounts, and access to a company swag store.
Which stipend platforms let us set different budgets and eligibility rules for different employee groups?
Compt supports configurable budgets and eligibility rules for different employee groups, including distinctions based on department, employment type, location, or other configured employee attributes.
You can offer the same wellness stipend to everyone or tailor allowances to different workforce needs. Supported HRIS integrations keep employee information synchronized, reducing the need to update eligibility lists manually. Compt also offers configurable claim-review workflows, including AI-assisted recommendations and optional high-confidence approvals, while keeping human review available for exceptions.
How does Compt handle tax treatment and payroll reporting for employee stipends and LSAs?
Compt applies your organization’s configured tax-treatment rules to reimbursement claims and generates payroll-ready reports that distinguish taxable and nontaxable amounts.
Compt maintains receipts, approval records, and reporting information for HR and Finance review. Supported ADP integrations can post directly to payroll, while other payroll workflows use customized export files. Your payroll system handles applicable withholding and wage reporting. Compt provides the infrastructure to administer these rules consistently, while your organization and its advisors remain responsible for determining the appropriate tax treatment and benefit structure.
Is there a free tool for creating an employee stipend policy?
Yes. Compt’s free Stipend Policy Builder gives employers a starting point for developing employee stipend and LSA policies.
You can define eligible expenses, exclusions, documentation requirements, and other program details. The tool generates an editable policy, employee guide, and communication templates. It’s useful whether you’re preparing to launch a wellness stipend or designing a larger flexible benefits program. Employers should review the resulting policy against their organization’s requirements before implementation.
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.
No receipt chasing
