A work-from-home stipend or remote work allowance is a certain amount of money that an employer provides to an employee in addition to their salary to help cover the costs associated with working from home. With the COVID-19 pandemic, many companies have shifted to remote work, and providing work-from-home stipends has become more common.
Overall, work-from-home stipends or allowances are intended to help employees manage the costs associated with working from home and maintain productivity while working remotely.
Common examples of work-from-home stipends
With the rise of remote work, some companies offer their WFH stipend also called work-from-home allowances to their employees as a way to support their needs and ensure their productivity. Here are some examples of common work-from-home stipends:
- Home office equipment stipend: Companies may provide a budget for employees to purchase office equipment like desks, chairs, and monitors.
- Internet stipend: Companies may offer to cover a portion of their employee's internet bill as the internet is crucial for remote work.
- Utility stipend: Since remote work requires employees to be at home for extended periods, some companies may offer to help pay for increased utility costs like electricity and air conditioning.
- Meal stipend: Some companies may offer a meal stipend to cover the cost of lunch or dinner for employees who work long hours.
- Childcare stipend: Since remote work may require employees to take care of their children at home, some companies may provide a childcare stipend to help cover the costs.
- Wellness stipend: To support employees' mental and physical health, companies may provide a stipend for wellness-related expenses such as gym memberships and therapy sessions.
It's important to note that not all companies offer work-from-home stipends, and the types and amounts of compensation may vary according to each company’s remote work stipend policy.
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What is the difference between a stipend and a salary?
A stipend and a salary are both provided as compensation for the work performed by an employee, but they differ in a few ways:
A salary is paid to an employee in exchange for their work, and it is usually a fixed amount paid regularly, such as weekly, biweekly or monthly. Salaries are typically higher than stipends. On the other hand, a stipend is a specific type of payment that is designed to cover a particular expense, such as living expenses or educational costs and may be lower in amount.
Additionally, salaries are generally subject to income tax and payroll taxes, while stipends may be exempt from certain taxes.
What are the benefits of providing Work-From-Home stipends?
Providing a remote work allowance or a remote work stipend is a way to help employees get a functional workspace at home which in turn can help increase employee satisfaction, performance, and retention. The benefits of work-from-home stipends can include:
Improved work-life balance
Work-from-home or remote stipends can help employees to set up a comfortable and functional home office space, which can improve their productivity and work-life balance.
Providing employees with the necessary equipment and tools, and work-from-home stipends can help to eliminate distractions and improve productivity. For example, a stipend could be used to purchase noise-canceling headphones, a standing desk or a faster internet connection.
Improved mental health
By providing a work-from-home stipend, employers can demonstrate their commitment to employee well-being, improving morale and reducing stress levels. This is especially important in light of the increased isolation and stress that many employees may be experiencing due to the pandemic.
Offering work-from-home stipends can help employers to attract and retain top talent, as it demonstrates a commitment to employee satisfaction and work-life balance.
What should a work-from-home stipend cover?
A work-from-home or remote work stipend is intended to help workers cover the expenses required for working remotely from home. It is up to the company to decide what to include in the stipend depending on the employer's policies, employment laws, budget and the employee's job requirements. However, some common items that may be covered by a work-from-home stipend include:
- Office equipment
- Internet and phone service
In some companies, anything purchased with a stipend is considered company property so employees must return all equipment when they leave the organization. Additionally, employers may offer additional benefits, like well-being and learning stipends that are not restricted to employees who work from home.
How much is a typical work-from-home stipend?
A typical WFH stipend varies greatly depending on the employer, industry, and location. Some employers offer a one-time payment to cover the cost of setting up a home office, while others provide a monthly stipend to cover ongoing expenses.
In general, work-from-home stipends can range from a few hundred dollars to several thousand dollars per year. For example, some employers may provide a $500 one-time payment to purchase a desk, chair, and other necessary equipment, while others may provide a monthly stipend of $100 to cover internet and other utilities.
Ultimately, the amount of a work-from-home stipend will depend on the specific needs of the employee and the employer's policies.
Provide a remote work stipend and boost employee retention
Remote work has enabled companies to hire beyond borders. It has given organizations the energy and innovation needed to diversify their brand, services, and workplace culture. With the increase in opportunities for employees worldwide, employers must now step up their game to continue attracting and retaining great talent. Companies that offer great employee experiences and take care of employee satisfaction will stand out in this new normal.
Partner with an Employer of Record platform like Skuad to hire, pay and manage your globally-distributed team. Request a demo to see how Skuad can help you provide stipends to your global workforce.