People across the globe have become accustomed to working remotely.

They have more flexibility, spend less time commuting, and have greater work-life balance than ever before. That’s precisely why they don’t want to return to the office. According to Gallup’s most recent Global Indicator report:

• Fewer than 20% of remote-capable employees worldwide work on-site.
• Only 7% of them say they prefer to work on-site (93% prefer remote flexibility!).
• Employees who could do their jobs remotely but are required to be on-site have seen the biggest decline in engagement since 2020.
• Six in 10 remote workers say they’re extremely likely to job hunt if that remote flexibility is taken away.

And in 2024, RTO mandates from corporations like Disney, Apple, Starbucks, and Amazon sparked significant backlash.

Companies that adapt to the needs of their most important asset (their people!) are coming out on top as the best companies to work at.

The ideal method for supporting your remote employees (also the most flexible and scalable option for HR) is a remote work stipend, also known as a remote work allowance, remote employee reimbursement, or work-from-home stipend.

We developed this guide to give you everything you need to know about remote work stipends as an employer.

What is a Work-from-Home Stipend?

First, a definition:

A work-from home stipend is money given to an employee, in addition to their base salary and benefits to cover expenses incurred while working remotely.

A work-from-home stipend can be designed for employees in one or both ways:

1. To cover the costs an employee incurs while working from home. For example, employees can purchase home office equipment, a coworking pass, a new coffee pot, and anything else that makes their remote work locations comfortable, productive, or successful. It can be a continuous stipend to cover ongoing expenses, or administered as a one-time equipment stipend.
2. To purchase general perks that an on-site team can access, but a remote employee cannot, such as food, health and wellness, learning and development perks, etc.

Further details on what they are:

• They’re also sometimes called a ‘remote work stipend’ or ‘remote work allowance.’
• The composition includes both taxable and non-taxable items. Employers can either gross up the taxes for the employee or require the employees pay them.
• Stipends can be disbursed on a monthly, quarterly, semi-annual, or annual basis.

Curious about what else can be classified under a remote work stipend?

Ready to Offer Work from Home Stipends to Your Team?

(Compt customers have 90% engagement rates!)

Talk with a Remote Stipends Expert

Benefits of Remote Work Stipends

Companies are embracing stipends and reimbursement policies to better support their employees.

The perk stipend model has numerous advantages, including benefit management, simplified tax handling, and enhanced business aspects like culture, talent retention, inclusivity, and employee engagement.

Remote work stipends are also highly sought after by HR and finance professionals as a valuable new lifestyle benefit.

Here are even more specific benefits of a remote stipend or reimbursement program:

Flexible for all remote work policies

One of the most impactful and relevant benefits of offering a remote stipend as a perk is that it’s adaptable for ANY working environment, whether you have a 100% remote team, a hybrid work model, or only certain remote/hybrid departments.

IRS compliance

If you use software like Compt, IRS compliance is automatically taken care of for you, making your HR and finance teams’ lives’ easier.

(Note: While it’s very common for companies under 100 employees to overlook the need to ensure tax compliance in their perk offerings, growing companies know how critical it is to have all employee compensation-related programs (like stipends) be done ‘by the book.’)

Better workstyle perks

Your team can access a broader range of benefits without increasing the overall budget. Because money is distributed directly to people, they can choose what’s best for them instead of picking a few perks everyone gets (but rarely everyone uses).

Enhance efficiency and reduce administrative burden

Stipends streamline HR operations by eliminating the complexities of vendor management and the need to oversee various software systems.

It is widely recognized that traditional perk offerings incur unnecessary expenses on two fronts:

1. Expenditures on perks that go unused
2. Significant time investments in selecting, piloting, procuring, managing, and communicating perks

Stipends eliminate all these inefficiencies, ensuring the timely delivery of individualized benefits. They also optimize resource allocation and minimize companies’ waste of financial and time-related expenses.

Strategic benefits for employers:

Remote work stipends offer strategic benefits for organizations that leadership loves by aligning with company culture and values, providing scalability, promoting mindful spending, and fostering deep connections with employees.

By tailoring your company’s perks to match your company’s culture and values, you can offer benefits that resonate with your employees on personal levels. Whether it’s a continuous learning stipend or a health and wellness stipend, they demonstrate your commitment to investing in these values.

They’re also scalable. As your company grows or goes through headcount changes, the inherent nature of stipends is their flexibility, which makes it easy to scale remote work investment up or down while keeping it relevant to your employees’ needs.

CFOs appreciate when money is invested well, and stipends ensure that happens. When employees are given the autonomy to choose how they allocate their funds, they become more deliberate in their spending decisions. The sense of responsibility stipends create encourages them to spend in ways that align better with their priorities.

Remote work stipends also enhance the connection between employers and their team — something that’s a lot harder to achieve without face-to-face interaction. When your people get to exercise autonomy in how and where they work, the relationship deepens.

Additional benefits of a remote work allowance:

• A remote work allowance ensures your company has access to a large pool of top talent, and can better retain talent who want more flexible work-from-home options.
• Employee engagement also increases. Employees satisfied with their benefits are 1.5 times more likely to be engaged, and WFH stipends cover critical bases for remote workers, both from a productivity and a wellness standpoint.
• What people purchase can relate to their home working space, work-life balance, mental health, or anything else that suits their always-evolving needs.
• Think about it like gift-giving: so many people aim for the ‘big reveal,’ but what people are really looking for is something they can actually use.

Psst: Weighing the pros and cons of perk software vendors? Check out our guide, Comparing Perk Stipend Software: Everything You Need to Know

If you’re still wondering why your remote team should have perks, here’s a piece detailing why your remote employees need support like your on-site team members. 

9 Examples of Real-Life Remote Work Stipends

Below are nine examples highlighting the unique approaches to remote work stipends, with varying remote work policies:

1) HubSpot: A hybrid-remote company provides their people:

• $1,000 stipend for their remote and hybrid people, plus wellness benefits employees can access from anywhere

Column: A company that offers 100% work-from-anywhere opportunities uses Compt to offer their team:

• A one-time stipend for new employees’ home office setup
• A quarterly stipend for internet bills, office equipment, and other productivity-related expenses
• An all-inclusive stipend covering whatever makes employees feel “healthy and whole.”

3) Basecamp: A fully remote company offers four stipends for their team members:

• $100/month coworking space stipend
• $100/month fitness allowance
• $100/month massage allowance
• $1,000/year continuing education allowance

4) Buffer: A fully-remote company offers several stipends as well:

• $1,000 one-off stipend to cover initial home office expenses
• A “Working Smarter” stipend to fund additional work-from-home needs (e.g., paying for a coworking space)
• $240 per year learning and development stipend (called the “Growth Mindset” fund)
• $250 per year AI tools stipend

5) Gusto: A hybrid team with many employees working from home, some or all of the time, offers two stipends:

• $500 one-time stipend to cover home office expenses
• $40/month internet stipend

6) Gimkit: A fully remote company offers the following stipend:

• $350/month working budget, which covers expenses like home office improvements, co-working spaces, and coffee shops
• $100 a month health and wellness stipend

7) Zillow: 90% of the workforce works from home at least part of the time:

• $450 one-time stipend for home office setup
• $150/month stipend to cover WFH-related costs

8) Calm: A remote-first company:

• $750 one-time stipend to create a comfortable and productive WFH workspace

What Expenses are Reimbursable in a Remote Work Stipend?

The answer to this isn’t as clear-cut as other stipend categories. It all depends on how you want to support your remote employees.

Below are some examples of eligible expenses for a work-from-home stipend:

• Cell phone bills
• Coworking space fees
• Office equipment (i.e., laptops, monitors, web cameras, computer accessories, etc.)
• Office furniture (i.e., desks, ergonomic chairs, bookcases, lighting, etc.)
• Office supplies (i.e., sticky notes, notebooks, printers, filing cabinets, planners, writing utensils, paper shredders, etc.)
• Headphones, Airpods, or noise-cancelling headphones
• Internet bills
• Music and podcast subscriptions
• Productivity apps for time management, work performance improvement
• High-speed internet
• Job-specific tools like Grammarly or Miro
• Professional development
• Electric and utility bills
• Meals or groceries
• Home office decorations like plants or art
• Under-desk treadmills or ellipticals

Psst: There are plenty of other things employees can buy with their work-from-home stipend. We’ve covered work-from-home stipend ideas at length.

Below are some examples of reimbursable expenses, if you are setting up your remote work stipend to cover similar perks offered to in-office employees:

• Health & Wellness
• Cell phone
• Learning & Development
• Family
• Food
• Travel
• Pets
• Tech/Equipment
• Student Loans
• Charitable Giving

With this approach, you can avoid building out a long list of vendors and initiatives you’ll cover. However, if you want to pick specific vendors with which employees can spend time, you may want to ​​take a vendor-based approach.

Do you have to reimburse your employees for remote work expenses?

The short answer is; it depends on where they live.

While there is no federal mandate for employers to cover the cost or reimburse their employees for work-related expenses, there are 11 states (and the District of Columbia) that do require reimbursement. (Note that federal law does require employers to reimburse for work-related expenses when these expenses drop the employee’s earnings below minimum wage). If your employees are in one of these locations, your organization could be subject to big penalties and consequences for failing to adhere to state mandates.

As of January 2025, here’s the list:

• California
• Illinois
• Iowa
• Massachusetts
• Minnesota
• Montana
• New Hampshire
• New York
• North Dakota
• Pennsylvania
• South Dakota

How to Set up a Remote Work Stipend

1. First, determine how much you want to offer your team members within what timeframe.

Some examples include offering $100/month, $500/quarterly, or $2,000 annually. According to our latest Lifestyle Benefits Benchmarking Report, Compt clients offer everything from $50 (at the low end) to $2,400 (at the high end) per employee per year.

Decide whether you want to offer a stipend only to remote team members or one in addition to what you offer all employees.

If you want insight into what the most successful companies do, we are happy to share examples and use cases our customers are seeing success with. Reach out to talk to a stipends expert today.

2. Secondly, select your stipend spending categories.

In the examples above, you’ll notice that they most often surround a category of spending like health and wellness, continuous learning, family, or travel.

Doing it this way allows you to create a custom program for your team and then allows 100% personalization for them.

If you’re looking for ideas for spending categories beyond a remote stipend, consider tying them to your company’s culture, goals, or important cultural initiatives.

3. Next, decide how you will manage the process.

Your options include:

Managing the remote work stipend manually

If you choose this option, be prepared to set up a process to track purchases, receipts, balances, approval, paid perks, and rejections or ones that need further review. Consider using Google forms to track submissions and Excel or Google Sheets to track progress, and create a process to track the nontaxable vs. taxable (for IRS compliance).

Choose stipend software to help you manage this

Options like Compt can help communicate your programs to your team members, track balances and spending, scale the process for you, automate a large portion of work, and provide valuable data insights around engagement and utilization. For situations where IRS compliance is a non-negotiable, Compt will make you and your finance team’s job much easier because it’s 100% IRS compliant.

Psst: If you’re looking for more information, we have written an in-depth guide to set up a lifestyle spending account here.

Other Types of Stipends

Below is a list of popular stipend categories:

• Cell phone reimbursement stipend
• Charitable giving
• Commuter stipend
• Equipment stipends
• Family stipends
• Internet stipend
• Learning & development stipend
• Meal or food stipends
• Pet care stipends
• Professional certification stipend
• Productivity stipends
• Remote work stipend
• Student loan stipend
• Travel & experience stipends
• Anniversary bonus
• Lifestyle Spending Account: Companies combine one or more of the above stipends to create a general perk stipend that gives employees even more flexibility to choose what matters to them, without increasing your budget.

Work-from-Home Stipend FAQs

1. Are work-from-home stipends taxable?

It depends on how you set your stipend program up and what the stipends are used for. When an employer provides a flat stipend without requiring employees to substantiate their expenses, this amount is generally considered taxable income. However, when employers reimburse employees for specific work-related expenses under an accountable plan, it isn’t.

2. What is a standard work-from-home stipend?

Because companies approach work-from-home stipends so differently, there’s no single typical example of a work-from-home stipend. Compt clients invest anywhere from $50 to $2,400 per employee per year for remote work expenses.

The structure also varies from company to company. Some give employees a one-time stipend to help them set up their home office (like Google, which gives remote employees a $1000 stipend to get their home offices up and running). Others opt for a monthly stipend (for example, $75 per month) to cover WFH-related costs, like internet, phone, and electricity. And some opt to do both.

Not only are the payment structures different, but the amount of the stipends can vary based on various factors-, such as the cost of living in the area where the employee works from home or whether the employee is fully remote or spends some time in the office.

3. Is an internet stipend taxable?

How a company pays for employees’ internet determines whether it’s taxable. Stipends are generally taxable, while reimbursements aren’t always. 

If a company gives an employee an internet stipend, it’s considered taxable. If you reimburse it as part of an accountable plan, though, it is not taxable (provided you’re getting receipts/expense reports from employees).

4. How many companies offer remote work stipends?

There’s no way to know exactly how many companies offer remote work stipends. For example, buildremote assembled a list of 101 companies that provide WFH stipends. But that list is by no means exhaustive and doesn’t include small companies offering various perks to their employees, including remote work stipends.

While it’s impossible to determine exactly how many companies offer WFH stipends, it is fair to say that the number of companies offering remote work stipends increased after COVID-19, when many companies shifted to full or partial remote operations.

Ready to make managing your remote work stipend a breeze?

With Compt’s stipend reimbursement software, you can easily create, automate, and manage your remote stipend programs while integrating with your existing payroll systems and track engagement rates in real time. Schedule a demo with us to learn more.

Editor’s Note: Originally published in 2020, this post has been recently updated for clarity and relevance for our readers.

The post The Ultimate Guide to Work from Home Stipends appeared first on COMPT.

This comprehensive guide covers everything related to employee perks, from the unique perks your employees are sure to love to best practices and insights into the future of perks in the workplace.

1. What are Employee Perks?

Before we can dive into all of the things you’d need to know about perks, we first should define perks by answering the simple question, “what exactly are perks?”

Definition of Employee Perks:

Employee perks are non-wage offerings beyond salaries and benefits (such as health insurance, dental, vision, etc.).

They’re often called fringe benefits too.

Perks are ways to support employees beyond their standard salary and benefits. There are multiple types of perks, such as purchasable, programmatic, and environmental perks.

• Purchasable perks include perks purchased by the company, such as catered lunches, books, fitness stipends, pet insurance, and student loan reimbursement.
• Programmatic perks are policy-driven advantages to working at a specific company, such as remote work opportunities, pet-friendly offices, or offering Summer Fridays.
• Environmental perks are how you set up your office, including meditation rooms and slides.

What perks are not:

• Perks are not a health care, dental, or vision package. Those are benefits.
• Perks are not essential company hygiene factors like mission, vision, values, fair pay, or a strong/ethical team.
• Perks are not equivalent to company culture but are an important component of creating the culture.
• While it’s really great if you work close to where you live, it wouldn’t be considered an ’employee perk,’ even if you’re working from home.

Psst: Read full definitions of compensation, salary, benefits, perks, perk stipends, and more here.

Perks are part of a total compensation package — not a replacement.

Employee perks are part of a total compensation package. They’re not meant to replace other types of compensation, like a competitive salary, bonus structure, or benefits. Employee perks are the extra things employers offer that show employees how much they value them as individuals with other needs outside of work.

Great perks can help top candidates choose between two employers who may offer similar salaries and benefits, and they can also help employees feel more supported and engaged on the job.

However, offering a wide variety of employee perks can’t make up for unfair compensation or lousy benefits.

More on the Definition of Perks:

Almost everybody understands how salaries, bonuses, and benefits work.

But employee perks? Not so much.

Perks have been loosely defined since their inception, and this is a surprisingly serious issue.

Why?

No definition for perks = no progress.

Without a precise and agreed-upon definition, our conversation about perks becomes confusing. We can’t discuss their role because nobody is on the same page, which means we certainly can’t solve their issues.

A prime example of misunderstanding perks is the not-so-distant past when people claimed company perks were equivalent to company culture or that simply adding a few fun perks could transform a toxic culture.

The lack of a clear definition has made it easy for perks to be stretched, pulled, and applied in many different directions to solve other organizational problems.

This has resulted in company perks becoming the quick, easy, and inexpensive ‘go-to’ solution for organizational culture issues.

Let’s be clear; we do not think perks should be used for these purposes.

The incorrect application of perks has led to their being widely misunderstood and disliked by both employers and employees.

Fortunately, those days are close to being over.

The industry has come a long way in the past decade. The reasons companies offer perks as well as the lifestyle benefits they’re seeking, are much more altruistic and impactful on employees’ lives.

However, we think there’s still room for improvement.

It’s time we reimagine how company perks can contribute to an employee and a company because right now they’re barely scratching the surface.

Want to learn how we can help you build, manage, and streamline perk stipends so your employees can get what they need most?

2. List of Employee Perks

If your goal is to continue with traditional perks programs, below is a short list of the perks that you can expect your people to want.

• Adoption assistance
• AI stipends
• Career coaching services
• Casual dress
• Catered lunches
• Cell phone stipends
• Charitable matching
• Childcare (in-office support or subsidized)
• College loan repayment services
• Commuter stipends
• Company outings
• Conferences & training
• Continuous learning stipends
• Culture events & initiatives
• Diversity programs
• Employee stock purchase plan
• Employee discount programs
• Equipment/tech stipends
• Family medical leave
• Generous parental leave
• Gym membership
• Happy hours
• Health & wellness stipends
• Lifestyle spending accounts
• Meditation rooms
• Meal allowances
• Online learning classes, courses, and certifications
• Onsite gym
• Performance bonus
• Pet-friendly office
• Pet insurance
• Professional development
• Recreational clubs (company-sponsored teams)
• Relocation assistance
• Remote work opportunities
• Remote work stipend
• Sabbatical leave
• Software stipends
• Stocked kitchen (snacks & drinks)
• Tuition reimbursement
• Unlimited vacation
• Volunteer time
• Wellness programs
• Wellness stipends

Want to see a full list of perks that engage your employees? Then check out our comprehensive list of top perk vendors.

3. Benefits of Employee perks

There are a lot of advantages to offering employee perks in 2025. Below are just a few of the most compelling points:

1. Perks make employees more productive and happier.
2. Perks help attract, engage, and retain superstar talent.
3. Company perks are not the only ingredient in employee engagement, but they help.
4. Investing money to keep employees is cheaper than hiring new employees.
5. Perks reinforce and strengthen the company’s purpose, values, and culture.
6. Perks are a relatively inexpensive way to support employees beyond salary.

1. Perks are employee benefits that make people more productive and happier.

If the amount of press coverage of company perks indicates their impact within organizations, they’re transformative.

A quick Google search for company perks will result in articles covering the “best unique employee benefits for 2024,” with perks that appeal to everyone from recent grads to working parents. While there’s not much research strictly tied to company perks and their impact on business outcomes, ask any recruiter about their conversations with potential employees, and they’ll talk about the importance of offering perks.

If you take a step back, you’ll see what matters is not the actual perks that matter; it’s what they signify. They show a company’s willingness and desire to support their employees and their goals, beyond simply getting the job done.

Sure, employees want free coffee, pet insurance, and in-office showers with towel service. However, they really want to have better, more productive, balanced, and happier lives and to work for a company that supports them in building those lives.

Employee happiness is excellent for an organization’s bottom line. Studies have shown that when employees are happy, they’re 13% more productive, which improves performance across the board—and can lead to an increased stock price for public companies.

Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.

— Richard Branson.

2. Perks help attract, engage, and retain superstar talent.

We’re clearly in a war for talent. The unemployment rate is at an all-time low, and the gap between the skilled labor necessary to complete a job and the labor available is rapidly increasing. These two factors drive companies to do everything they can to attract, engage, and retain top employees, and offering company perks is a standard way employers accomplish their hiring and retention goals.

We’re preaching to the choir here, but hiring the right people for the job is challenging. In fact, 76% of hiring decision-makers say attracting quality candidates is their #1 challenge.

Why is there such a significant emphasis on quality talent? Every organization wants high-performing employees, and top-quality candidates often have unique interests and priorities. Gallup research suggests that employers study top talent within the organization to ensure that recruiting messaging and experiences align with what the right candidates will be drawn to.

3. Company perks are not the only ingredient in employee engagement, but they help.

Today, salary ranges are transparent. It’s easy for any employee to pull up Glassdoor and have an idea of what they’re worth and how much they can expect an employer to pay them. This transparency in tight labor leads employees to look to other elements of the organization to know if they’re the right career home for them for the foreseeable future.

Insightful research from Adam Grant states that employees only care about three things: career, community, and cause. These three are directly related to an employee’s ability to grow in their career, feel like they belong and are respected, and work on a mission or cause they believe in.

Patrick Lencioni’s book, The Truth About Employee Engagement, boils employee happiness down to three similar items:

• to feel like you matter
• the work you do has an impact
• and that you’re making progress

Many of today’s perks support people’s journey toward achieving these deep desires. Company perks like book clubs, Toastmasters memberships, company-sponsored sporting teams, or even ocassionally paying for happy hour can develop an internal community.

Additionally, continuous education and training help team members grow and achieve more in their careers, helping them to have a more significant impact on their company’s mission.

Company perks are not the only ingredient in employee happiness and engagement. A carefully crafted perk program can be more strategic in fulfilling employees’ needs than people realize because it is a lifestyle benefit that goes beyond basic benefits.

4. Investing money to keep current employees is better than investing in hiring new ones.

When talented employees are happy, organizations win. As pointed out above, happy employees are more productive. They also tend to stay at their companies longer, making employee retention an essential focus for companies.

According to Kronos and Future Workplace research, 87% of HR leaders consider retention a critical or high priority over the next five years. And rightly so. Pre Pandemic research by Gallup puts the cost of replacing an individual employee at one-half to two times the annual salary of that position, with employee turnover costs totaling a trillion dollars for U.S. companies. With the increased challenge of hiring amid a talent shortage, those costs could climb even higher this year.

Many employee perks are low or even no cost to employers. However, even perks that come with a price tag pale in comparison to the rising costs of employee turnover. Investing in your current employees, and creating a more satisfying and rewarding work environment can save you thousands — or more — down the line.

5. Perks reinforce and strengthen the company culture.

For too long, company perks have been added to companies without too much strategic thought behind them.

They’ve slipped into a reactionary mindset. “Everyone wants yoga, so we’re offering yoga” and “Everyone is offering ice coffee and kombucha on tap, so we should too.” As HR strives to become the strategic partner to leadership, as Dave Ulrich mentioned in Human Resources Champions, it’s essential to zoom out of the day-to-day operational focus and offer a strategic approach to perks that provide a competitive edge for the company.

One method of becoming a strategic partner is offering perks that do more for the business and its employees by proactively strengthening its unique purpose or core values.

Perks should reinforce values like empathy and learning or principles like “never eat alone,” which are powerful ways to translate what matters to the company into employees’ everyday lives.

What results is an even more pronounced and positive culture.

This reinforcement is seen on a micro level in the differences between employees collaborating over lunch vs. eating in silos. It’s the difference between employees comfortably owning their failures vs. sweeping them under the rug. It’s the difference between your LGBTQ+ team members being comfortable bringing their whole selves to work versus feeling withdrawn or even alienated.

Here are examples of ways that companies can reinforce their unique culture:

• If you are a digital health company, offer health and wellness benefits.
• If you are a fertility company, family-planning benefits are appropriate.
• If you’re a travel and hospitality company, tie perks to your mission. Airbnb provides employees with a travel allowance of $2,000 a year. The caveat is that they must stay with an Airbnb host while traveling to experience life as their customer would, which develops greater empathy and understanding of their customers and their needs.
• If you have an ‘always be learning’ value, strengthen it by investing in a books program, an annual conference budget, or bringing outside experts to the office to offer educational workshops or activities to learn and grow.

Through perks, a company invests in clearly communicating to its employees what matters to the organization and what behaviors they value.

Make sure you’re thinking about your perks program strategically to differentiate yourself from competitors vying for talent.

6. Perks are a relatively inexpensive way to support employees beyond salary and health insurance.

Instead of increasing everyone’s salary, company perks can offer more value.

Making employees happy doesn’t necessarily require a salary increase, especially if their salary is already at a point that leads to a high quality of life. As Daniel Pink’s book Drive suggests, once people meet a certain level, they can focus on intrinsic motivational factors such as mastery, autonomy, and purpose. And offering the right perks can even convince your people to spend more time working on-site if that’s what your business needs. A 2022 survey of office workers revealed the most wanted perks as fitness perks, such as yoga studios and office gyms (46%) and access to a designated quiet space (44%).

Perks can enhance employees’ lives in many ways that more money cannot, such as adding convenience, continuing their education to advance their careers, caring for their families in ways they might not be able to alone, contributing more to others, and developing a greater sense of community.

Perk stipends: the Best Company Perks?

Have you heard of perk stipends yet? They empower HR to craft custom programs that enable their people to purchase the perks they want and need most.

In the example above, Sam’s company allocated $100 per month to spend the following perk stipends: learning, health & wellness, and food.

What would you buy with your $100/month for perks?

Download Perk Software Buying Worksheet

Whether you’re selecting individual perks, debit cards, or Compt’s stipends, our goal is to help you choose the best perks program for your situation.

4. How to select the best company perks

Not all company perks are created equal.

That’s why we’ve created the 4Cs and 1P framework, which we’ll explore below.

It’s a tool that HR managers use to ensure they approach employee perks thoughtfully and proactively.

We aim to help companies everywhere find balance and inclusion in their perks. We talked with many HR professionals about their perks programs. From these conversations, we noticed four distinct methods for considering perks and selecting the best ones for an organization.The first thing to consider when offering perks is their purpose.

1. First, consider the perk’s role or purpose

Each perk has a purpose — i.e., the reason it’s being implemented at an organization.

Reflect on the difference between offering your employees catered lunches versus conference allowances.

The purposes of perks can be divided into five distinct categories, which we refer to as the 4C and 1P: Convenience, Career/Continuing Education, Community, Contribution, and Personal/home life.

Convenience

Convenience perks are about adding comfort to an employee’s life. For example, not having to leave work to accomplish essential errands can be a huge time saver. There are two types of convenience perks: those employees pay for and those they don’t.

Perks like in-office dry cleaning, car washing, and manicures are brought into the office to save the employee’s travel time or organizing, but they’re still often paid for by the employee. Company-paid convenience perks include catered lunches, office snacks, and coffee bars.

Continuous education/career

Education perks aim to assist employees in developing further mastery of their craft. When employees learn more, they’re more intrinsically motivated, productive, and happier, and that positivity flows throughout their work. Whethe​​r they’re leaders or someone who leads without the title, this positivity can be contagious and permeate other employees and their work.

This type of perk includes conferences, book programs, paid online training or seminars, and professional organization memberships.

Community

While most people don’t realize it, the community element can have a tremendous impact when it comes to selecting perk options. Perks like in-office yoga or meditation sessions, extracurricular sporting teams, or happy hours lead to increased community and personal growth among employees.

Community is a sense of connection and belonging. The community is feeling respected and cared about.

Perks like in-office yoga or meditation sessions, extracurricular sporting teams, or happy hours lead to increased community and personal growth among employees.

Contribution

We define this as supporting employees in their contributions to helping causes.

Contribution-categorized perks could include creating a policy around volunteer days, running a company-wide charity like bringing canned foods for the hungry or school supplies for needy children, and even offering matching programs for charitable giving.

Those are the main purposes that most perks have, though some might not fit squarely into a particular category. Often there’s overlap, which is excellent.

If you can find perks that fulfill multiple purposes, you can offer more value to your employees and give them the best possible experience.

Though the purpose is an important idea to keep in mind when selecting perks, it’s not the only one. There are still costs, employee use, and the impact that still have to be considered.

Personal/home-life

Personal or home-life perks apply to the perks that employees use outside of the office to make them more balanced, fulfilled, and whole, which will positively impact their work. This includes discounts on gyms or health and wellness perk allowances. It also includes perks such as tuition assistance, pet insurance, daycare support, or egg-freezing.

Wellness Programs

Wellness programs are great for employee satisfaction and one of the best company perks you can offer. Design your employee perk program to center on wellness, and you’ll see more engaged teams. More engaged teams mean lower employee turnover and a much better environment.

2. Next, think about how much perks cost

Perks can range anywhere from free to thousands of dollars per employee.

While we believe company culture shouldn’t be about the size of your wallet but the size of your heart, it’s true that companies with bigger pockets can offer more expensive and specialized perks.

That’s why large organizations can afford to cover tuition reimbursement, egg freezing and other fertility treatments, and gender-affirming surgeries.

If you’re an organization with a tight budget, company perks are not out of reach. However, they might require more creativity and come as a company culture initiative.

Instead of offering gym passes or installing an on-site gym, develop a free “100 Push Up Club,” create a company-wide 30-day challenge where everyone picks their own goal, or develop a fitness contest where the winner receives a prize like a Fitbit or a pass for a free massage.

3. Consider how many employees they’ll support

Thinking that all perks will apply to everyone is an outdated line of thinking.

When perks were brand new, and everyone was happy to have something extra in their office, people appreciated everything and anything.

As more companies offer perks and the employee experience becomes increasingly personalized, employees want perks customized to them and their needs.

Take providing beer, for example. While beer used to be an excellent starting point for offering perks, there is rarely an office where everyone drinks beer. Some people are gluten-free, prefer wine, are new parents, and would prefer some other investment with that perk money, or are remote employees who cannot enjoy this perk.

Apply this approach to all of your perks, and you will quickly see how lopsided your offering can become.

When thinking about your perks, be sure to honestly assess how many people and who they’ll apply to. Remember to consider your remote team, too.

4. Lastly, consider the impact they’ll deliver to an individual and the organization

Perks have different types of impact and varying levels of impact.

With company perks, often there are two approaches to impact: proactive and reactive.

Proactive perks are offered because the company is proactively trying to align with new company values or industry trends.

Reactive perks happen when companies offer perks in response to their competitors or the industry or realize that they need to address a need within their company.

An example of the latter type of reactive perks is a company that notices that its team isn’t staying up on their craft. In this case, the company might institute a book program, a book club, or even give everyone a couple of hours of ‘learning time’ per week to help them improve their skills.

Some of the other considerations addressed less often when it comes to picking a perk are:

• how easy it is to implement
• the time it takes to manage
• and how it will scale as the company grows.

Ultimately, before deciding on your company’s new office perk, it’s important to know what goal you’re trying to accomplish and where it falls on a spectrum of money, employee application, and impact.

To learn more about which perks would be best for your team, check out Top Innovative Perks.

Receive a Perks Program Review

Are your perks not accomplishing their goals anymore? It could be time for an update.

Receive a Perks Program Review

Or complete one yourself

5. Problems with Perks Today

Perks as a talent strategy have been around for a while, and as their role and significance inside organizations increase, so have the problems associated with them:

They’re no longer innovative, they’re required.

With the unemployment rate at an all-time low in the United States and the skills gap increasing, top talent is more difficult to attract than ever. Companies are turning to perks to stand out from the competition. Offering perks was once an innovative strategy, but companies of all sizes and budgets have since adopted this approach.

As Kirsten Pollard, Chief People & Culture Officer at OFX, puts it:

“[The basic perks] are more than important, they’re essential. The competition to retain talent is rife, and perks are expected these days.”

They are now challenging to manage and maintain.

Regardless of whether you offer two or 20 perks, someone on your team (maybe you?) will have to pick, purchase, and maintain them for the team. Today, most people use email filtering and spreadsheets to keep track of this, which is an inefficient and time-consuming model.

If you feel this pain, learn more about the Perks Tipping Point to see how you can address it.

Their adoption is growing, but the models of offering them haven’t kept up.

Unlike many other industries, perks have no frameworks or processes defined for how companies should pick them. Most people rely on prior knowledge, experience, and those around them.

If you’re looking for a new approach, check out lifestyle spending accounts which are the new approach many companies are taking.

The research on them and their impact is still minimal.

Because they are often combined with benefits in research studies, they have not been adequately considered.

To combat this, we’ve begun pulling together a big list of perk statistics.

There aren’t any ‘perfect’ or ‘best’ perks.

Many articles online tout ‘the best’ company perks, but the truth is that everyone’s preferences, wants, and needs are different. On top of that, what someone might need today regarding health & wellness or continuous learning might be completely different in six months.

Lastly, the perks standard is being set by big players with big budgets.

We think company culture shouldn’t be about the size of the company’s budget but rather about the size of the company’s heart.

With big-budget companies having unlimited opportunities to buy perks, smaller companies must be more creative than ever before if they want to compete.

Here are a few examples of employee perks that large employers offer:

• Microsoft: a host of well-being perks, including wellness stipends, financial planning, on-campus services, Employee Resource Groups, and expanded family benefits and professional development opportunities.
• Google: Free food, dog-friendly workplaces, on-site fitness centers, nap pods, floating wellness days, and stipends for new parents.
• Visa: donation matching, PTO and cash incentives for volunteering, education programs, and tuition support

Additional reading:

• The Number of Perks is Growing and So Are the Problems They Create
• 6 Ways Your Perks Might Be Failing (Even If You Offer Indoor Rock-Climbing and an Espresso Bar)
• How to Change or Consolidate Your Perks

6. The Future of Company Perks

What does this year have in store for employee perks? We set out to answer that question. We recently interviewed passionate, people-first folks in the people operations industry, including managers, tech CEOs, and culture software owners, and asked them to share their thoughts.

Below are the employee perk trends that bubbled to the top:

1. Evolution away from basic amenities to more meaningful perks
2. Emphasis on flexibility and personalization
3. An expanding use for perks
4. More companies offering more perks

As Baby Boomer employees retire, more Generation X (and Y) will face the challenges of balancing their parents’ and grandparents care with their careers, often on top of their own immediate family. Employers can help by offering expanded perks related to caregiving roles, such as childcare and elder care services or reimbursements, additional time off, flexible work hours and location, and even stipends to help supplement other caregiving costs.

A parting thought…

“Culture eats strategy for breakfast.” – Peter Drucker

Company perks are still in the early innings for their use in companies everywhere. As the talent market continues to tighten, and the percentage of Gen Z and millennials in the workplace increases, companies will continue to turn to perks as strategies to enhance their culture, differentiate themselves, and make a meaningful impact on the lives of their employees.

This post was originally published in 2019, but has been updated recently for clarity and relevance for our readers.

The post How to Offer Better Employee Perks at Work in 2025 appeared first on COMPT.

Learning and development stipends for employees have been gaining in popularity over the past few years, especially as a way to both improve employee productivity and increase retention.

But, as more companies seek to understand the state of learning & development and find the right solution for their workforce, more questions arise.

That’s why we developed the definitive guide to everything you need to know about these education-forward, people-first stipends:

What is a Learning Stipend?

First, a definition:

A learning or education stipend is a post-tax sum of money given to employees for them to spend on learning initiatives that are relevant to them and their needs.

Further details on what they are:

• They are also often referred to as educational stipends, learning stipends, or professional development accounts.
• Learning stipends can be given out on a monthly, quarterly, semi-annual, or annual basis.
• They are nontaxable items (which means receipts are required for reimbursement)
• They can range in value from a few hundred to several thousand dollars.
• They can be used for a variety of educational opportunities, such as conferences, workshops, online courses, books, and training materials.
• Some companies even offer creative ways to use the stipend, such as funding parenting courses, language classes, or a new hobby.

Buffer: A Primary Example of a Learning Stipend

Here you can see a screenshot from Buffer’s $20/month learning and development stipend.

To achieve their learning goals, it wasn’t just one learning platform or program that Buffer’s employees used; their team spent money on 15 unique categories.

How could an HR or People Operations professional create a program that supports this diversity of needs?

This perfectly illustrates the power of a perk stipend or lifestyle spending accounts.

Foster a culture of learning and continual growth with easy-to-manage, visible L&D workflows

(Compt customers see 90% participation rates!)

Learn more

Why Use Learning & Development Stipends

Learning and development can take on various forms: coaching, classes, conferences, training, learning through books, and many others. The fact of the matter is one-size-fits-all training doesn’t work anymore. Today’s employees expect learning that’s tailored to their current skills, future career goals, and unique schedules.

Learning stipends have quickly emerged as one of the best — and most popular — solutions for encouraging employees to always be learning. A learning and development stipend, rather than a formal learning platform, has really become the go-to education-based lifestyle benefits solution for HR teams because it’s so much more flexible and effective than the traditional “we pick the learning process or path” for you.

The five biggest benefits of stipends vs. other L&D benefits models:

• Stipends are more cost-effective. Traditional learning platforms can be expensive, especially if every employee isn’t fully utilizing them. When you offer a stipend through Compt’s stipend reimbursement model, you’re only paying for what employees are actually using.
• They’re also more flexible. When designing any stipend, flexibility is the most important factor. Stipends are inclusive, remote-friendly, allow for life changes, and are easy to understand for your employees. Not to mention, they can be used for anything learning or development-related including, and now especially, AI-focused adoption!
• They facilitate more learning and development. Because you let people pick the best learning resources and styles (e.g. books vs classes) for them, they’re more likely to engage with stipends: this means more usage = more learning.
• Employees can take ownership of their growth. When everyone can choose the resources that suit their learning preferences, they’ll be happier with your benefits package overall, and be more invested in their progress. And if they opt-in to share their learning on LinkedIn, it also creates community and connection for those learning the same thing.

HR has less burden (plus better insights). Employees’ ability to personalize their professional development experience means HR and management don’t have to figure out which training to suggest to each employee. On top of that, with Compt’s Professional Development Pro™, employees have access to the latest reviews on learning purchases from peers in related functions (peers can see what others are learning, reviews, and their rating on a scale of 1 to 5).

The Data on Learning Stipends

Educational stipends aren’t new by any means. But, increasingly, companies are recognizing the need for upskilling to meet evolving workplace demands, particularly in fields like AI and technology.

Below find stories, relevant statistics, and more from companies that are offering these to their employees:

• According to ADP Research Institute, only 47% of employees think their companies invest in the skills they need to advance.
• Among millennials — who make up 35% of the workforce, the largest generational group — nearly nine in 10 say opportunities for career growth and professional development are “very important to them” in a job.
• Only one in five L&D practitioners strongly agree they are prioritizing the skills their organization will need in the future.
• Andrew Geant, cofounder of Wyzant, believes learning stipends have proven effective at boosting employee retention and even improving their recruiting capabilities in an increasingly competitive market. “In interviews, potential employees often cite the learning stipend as a top reason they applied,” Geant has said.

Among Compt users, they’re also quite popular — in our 2025 Lifestyle Benefits Benchmarking Report, we found that 1 in 5 Compt users offer stipends for professional development of some kind. And they’re growing in prevalence year over year — spending on professional development increased from 13.3% in 2023 to 15% in 2024.

7 Examples of Learning Stipends

There is no one-size-fits-all learning stipend, as every company’s size, budget, and focus on learning are different. Check out how the culture giants below leverage the flexibility and personalization of learning stipends.

1. HelpScout

Help Scout has a “Learn Something Stipend” where each employee is given $1,800 to spend annually on learning.

2. Buffer

As mentioned above, Buffer spends $20/month on every employee to learn in three main ways: core learning, stretch learning, and holistic development, and in 2025 they launched a $250 annual stipend dedicated to AI tools.

3. Gong

While the amount given to employees is unknown, Gong does offer its employees an “education & learning stipend for personal growth and development.”

4. VTS

Compt customer, VTS, offers their employees $1,500 annual stipend to support continuing education, with a portion that can be used specifically for health and wellness purchases.

5. Udemy

Udemy offers up to $1,500 annually for external learning opportunities after six months of employment.

6. Smartsheet

Smartsheet provides their employees $1,000/year to spend on learning-related items.

7. Atlassian

Atlassian provides their people with a “tuition learning budget.”

How to Make the Most of Your Learning Stipends

If you invest in your people, they will invest in you.

As famous speaker Jim Rohn once said, “When you invest in people and lift them toward their potential, they will love you for it.” From career coaching to conferences and books, learning stipends let managers and employees pick the best path for them to reach their potential.

Below are some ideas as to how your employees and your company can get the most out of your learning stipend:

Formalize it with process and documentation.

A learning stipend that isn’t documented and doesn’t have a formal process only leads to confusion.

We’ve all been at organizations that haven’t properly outlined exactly what the benefit is, what’s covered, and how to take advantage. This leads to more questions for employees and more questions for HR to address.

Eliminate questions, confusion, and lopsided support for only some people by properly documenting how much people have, how it can be used, and how to best redeem this perk. You can document this process on an internal wiki, like Atlassian or Tettra, or manage the whole process through a perk software like Compt (hey there!).

Include it in your job postings.

Job candidates care tremendously about benefits (in some cases, more so than the salary). Indeed’s 2024 Workforce Insights Report, which explores in-depth what motivates job seekers, finds that the driving force behind more than one-third of workers’ job search is the desire for better benefits.

Since so many job seekers hold professional development opportunities in such high regard, why not make your continuous learning stipend a prominent selling point in job postings? Let your potential employees know that you’re committed to their continued development and you make this possible by giving them a stipend to pick the best methods of learning for them.

Set a metric for adoption or usage.

At Compt, we find that ~94% of employees take advantage of their company’s monthly stipends, depending on the stipend program.

Set a utilization, adoption, or participation metric that you’re shooting for, and then create a process to support that.

One example of a good process is developing manager training to help find ways to get their team members to take advantage of the programs available.

Keep in mind adoption will vary based on the stipend in question. For instance, a category like Food or Health and Wellness will have a higher adoption rate than L&D because it’s less of a general interest category.

Where relevant, tie back to a company value

Since today’s labor market is crowded. With three of the six billion companies in today’s US labor market being hyper-competitive, finding and keeping talent isn’t easy. By having a clear and powerful mission, vision, and values (MVV), you’re able to find people who have similar beliefs which will attract them to your business.

Double down on your MVV by investing in it. If you have a value of “Always be learning”, then having a learning stipend tied to that really helps you walk the walk.

Design your program according to your budget.

When you implement an L&D stipend program, you have two major considerations: (a) how much you’ll offer and (b) how often you’ll make those payments.

As you can see from the seven examples we’ve given above, learning and professional development stipends vary wildly. Some companies, like Buffer, spend $20 per month. Others, like Balsamiq, give $3,000 per year. Among Compt users, stipend amounts range from $100 to $2,000 on average.

Design your program for maximum utilization.

When you implement an L&D stipend program, you have two major considerations: (a) how much you’ll offer and (b) how often you’ll make those payments.

As you can see from the seven examples we’ve given above, learning and professional development stipends vary wildly. Some companies, like Buffer, spend $20 per month. Others, like Balsamiq, give $3,000 per year. Among Compt users, stipend amounts range from $100 to $2,000 on average.

As for the timing, we’ve found that most companies offer L&D stipends on an annual basis. This allows them to consider larger investments, like a course or conference, the upfront costs of which wouldn’t be coverable with a smaller monthly or quarterly stipend.

Encourage employees to pursue unique learning opportunities.

In one of our recent Getting Personal with Compt episodes, we spoke with learning and development strategist Molly Dennen. According to her, employees’ skills and experience go far beyond their hard skills. Each of your team members has broader soft skills and interests that make them dynamic and interesting.

“The problem is that we’ve asked people to not be themselves. We’ve asked them to be a very specific version with 15 years of experience using this one program, this one app, this one, whatever it may be. And so we’ve asked them to ignore the other components that make them interesting people.”

When people approach tasks and challenges at work, they do so by applying what they’ve learned on their own personal learning journeys. If you’re solely looking at the textbook hard skills, you’ll probably miss that nuance. That’s why, to get the most out of a professional development initiative, you have to allow employees to channel what makes them a unique asset to the company.

What People Buy with their Continuous Learning Stipend

As we mentioned above, you can keep your stipend’s spending as open or closed as you want. We find that the more you let your team decide what’s best for them, the happier, more productive and empowered they will be.

In short? It’s best to make it as open as possible.

In our 2025 Benchmarking Report, we analyzed more than 2,500 claims from professional development vendors to understand what today’s employees truly prioritize. Here are the top categories Compt users have purchased through their stipends:

• Books & eBooks (hard copy, audio, and Kindle)
• Certifications related to their professional field
• Conferences and networking events
• Career coaching services
• Membership fees for professional organizations
• Online courses (e.g., Udemy, Coursera, or a Udacity Nanodegree)
• Subscriptions (e.g., Babbel, Blinkist, LinkedIn Learning)
• Tools and productivity software

The costs associated with graduate degree programs, local meetups, and workshops are other examples of expenses your employees can potentially cover with their stipends.

What makes Compt so special is that you can also use it to manage ad-hoc learning and development requests for tuition reimbursement, and other reimbursements for things like courses, classes, and professional certifications.

Other Popular Types of Perk Stipends

A perk stipend makes it possible for companies to offer more perks, with less money and ensure that they are personalized to meet the needs of their people.

Below are some of the popular types of stipends:

• General perk stipend: Companies combine one or more of the stipends below to create a general perk stipend that allows employees to pick from many spending categories.
• Health & wellness stipend
• Remote work stipend
• Equipment stipends
• Meal or food stipends
• Cell phone stipend
• Pet care stipends
• Travel stipends
• Experience stipends
• Charitable giving stipend
• Commuter stipend
• Student loan stipends
• Employee bonus stipends

Is your L&D Workflow Working for You, or Against You?

Our new professional development module streamlines requests, approvals, and budget tracking, eliminating complex workflows and empowering employees to grow and develop. Sound like something your team could use? We’re just a click away!

Originally published in 2020, this post has been recently updated for clarity and relevance for our readers.

The post The Definitive Guide to Learning & Development Stipends appeared first on COMPT.

That’s why more companies are turning to employee stipends to solve both problems.

In 2026, employee stipends are most commonly delivered as reimbursement-based programs (often called Lifestyle Spending Accounts, or LSAs) that balance flexibility, tax compliance, and high participation.

This guide breaks down everything you need to know about employee stipends: what they are, how they work, common use cases, tax treatment, and why they’ve become the most flexible, inclusive, and future-proof way to deliver lifestyle benefits.

What is an employee stipend?

First, a definition:

Employee stipend (2026 definition):
An employee stipend is an employer-funded benefit that provides a fixed budget employees can spend on approved categories (such as wellness, professional development, food, or remote work), typically reimbursed after purchase to ensure tax accuracy and compliance.

You might also hear employee stipends referred to as:

• Lifestyle Spending Accounts (LSAs)
• perk allowances
• lifestyle accounts
• specialty accounts
• lifestyle benefits
• wellness wallets (a vendor term for a flexible wellness spending benefit; see definition in FAQs below)

Stipends can support wellness, remote work, food, family care, professional development, AI tools, and more.

Companies typically distribute stipends on a monthly, quarterly, annual, or semiannual cadence. Employees make a purchase, submit a receipt, and get reimbursed — a simple process that keeps employers compliant and employees free to choose what works best for them.

Table: How employee stipends typically work

Now let’s ground that in real-world data. Here are the 2026 employee stipend benchmarks from Compt’s 2026 Annual Lifestyle Benefits Benchmark Report (full-year 2025 Compt customer data).

2026 employee stipend and lifestyle benefits benchmarks (by company size, category, and cadence)

In 2026, most employee stipends are delivered through all-inclusive LSAs, funded quarterly, and measured by participation. Compt’s 2025 customer data shows small companies fund more per employee, while larger companies prioritize scalable, broad category design.

If you’re evaluating employee stipends in 2026, the most common question is simple:

What are other companies actually funding, and how are they structuring their stipend programs?

Compt’s 2026 Annual Lifestyle Benefits Benchmark Report (full-year 2025 Compt customer data) shows a clear shift toward consolidation, quarterly funding, and all-inclusive Lifestyle Spending Accounts (LSAs).

Benchmark methodology (2026)

The 2026 Annual Lifestyle Benefits Benchmark Report is based on:

• Full-year 2025 data from active Compt customers
• Participation = % of eligible employees who submitted at least one reimbursement
• Utilization = % of allocated budget that was spent
• Data excludes terminated employees
• Outliers may affect category-level maximums

Here’s what that looks like in practice.

How common are all-inclusive LSAs?

In practice, “Lifestyle Spending Account (LSA)” is the most common umbrella term for all-inclusive employee stipend programs:

• 64% of companies now offer an all-inclusive LSA, up from 55% the prior year.
• Most LSAs include 5+ spending categories (82%), rather than single-purpose stipends.
• Wellness performs better when embedded in an LSA (86% utilization) vs. standalone wellness stipends (62%).

This confirms a broader design trend: no matter the label, employers are consolidating scattered perks into one flexible structure. Employer-provided employee stipends give employees meaningful choice in their benefits while eliminating the complexity of managing multiple traditional perk vendors.

Average stipend funding by company size (per employee, per year)

Small companies continue to invest more per employee, while larger companies focus on scalable, broadly accessible structures.

Median annual funding by common category

(Full ranges vary by company size and design, with outliers extending significantly higher. See the 2026 Annual Lifestyle Benefits Benchmark Report for the full set of categories.)

Which funding cadence performs best?

Employee utilization varies significantly by cadence:

Quarterly funding consistently balances:

• Budget predictability for Finance
• Planning flexibility for employees
• High participation and utilization

As a result, most all-inclusive LSAs are funded quarterly.

What does “good” participation look like?

Across Compt customers in the 2026 Annual Lifestyle Benefits Benchmark Report (full-year 2025 data):

• 95% activation rate
• 93% participation rate among active users
• 89% utilization for all-inclusive LSAs

In 2026, participation — not just utilization — is the primary success metric for modern stipend programs.

What are employees actually spending on?

• 1 in 10 stipend dollars is spent at grocery retailers
• 70% of spend goes to local, regional, or niche vendors
• 20% of professional development expenses are AI-related
• 78% of total stipend spend is taxable (design-driven, not failure-driven)

Spending increasingly reflects everyday cost-of-living realities, not just discretionary purchases. At the same time, the core design of a stipend or LSA allows employees to choose where support matters most.

What this means for 2026 employee stipends and lifestyle benefits design

Modern employee stipends in 2026 are:

• Consolidated (LSA-first)
• Quarterly-funded
• Broad in category design
• Measured by participation
• Layered with selective nontaxable categories

If your program is still fragmented across vendors, funded monthly, or narrowly restricted, it may not reflect where the market has moved.

In short, stipends are the simplest way to offer flexible, personalized perks. These design choices are why stipends keep growing in 2026: they boost participation, simplify administration, and give Finance clearer tax handling, without adding more tools, vendors, or overhead. 

Example of an employee stipend

In the example above, Sam’s company has allocated $100 per month to her and other employees to spend on the following perk categories: continuous learning, health and wellness, and food.

This month, Sam:

• Bought two books
• Renewed her gym membership
• Grabbed lunch with her team

She still has $20 left to use on anything that fits the categories before the month ends.

How would you spend $100 this month?

Schedule a demo

Examples of leading organizations using stipends today

We’re living in the age of personalization. Everything in our daily lives — what we watch, how we shop, the devices we use — is tailored to us and our unique preferences. 

Employee benefits are no different.

Organizations are moving away from one-size-fits-all perks and toward employee stipends (or Lifestyle Spending Accounts) because they give people real choice. They’re the best method for companies looking to introduce more personalization to employee benefits without adding complexity.

While funding amounts and categories vary, most modern employee stipend programs follow similar design patterns: clear funding cadence, defined spending categories, and reimbursement-based administration. The examples below show how companies structure employee stipends in practice, including monthly, annual, and layered approaches.

Here are examples of companies using employee stipends to support their teams in flexible, human ways:

• Webflow: A monthly stipend employees can use toward work and wellness expenses, including cell phone service, internet, gym memberships, meditation apps, and more.
• Qualtrics: A $1,800 annual “Experience Bonus” employees can use for concerts, trips, sports, events, or charity; a $1,200 annual wellness stipend; and up to $10,000 reimbursed for adoption or surrogacy expenses.
• Evernote: A $1,000 annual vacation stipend to encourage employees to take meaningful time off.
• Buffer: A comprehensive stipend program that includes a $1,000 home-office setup stipend, an annual family support stipend ($3,000 per year per child, for up to four dependents), a $250 AI tools stipend, a coworking/working-smarter stipend, and annual learning and development funds.
• GitLab: A monthly remote-work stipend employees can use for home-office supplies, ergonomic equipment, and workspace needs.
• Fictiv: A 13-category stipend program powered by Compt (including cell phone, internet, continuous learning, remote work, and team events) with 95% employee participation.
• ButterflyMX: A $300/quarter “Self-Care Stipend” administered in Compt that covers wellness, groceries, fitness, pet care, and more across 10 countries.
• Carrot Fertility: Multiple stipends delivered through Compt, including a new-hire tech stipend, a productivity stipend, wellness spending, and meal-related spot bonuses.
• Quickbase: A flexible lifestyle stipend program set up in Compt that consolidates multiple vendors and supports spending across more than 1,300 vendors.
• TEN7: A comprehensive stipend program managed in Compt that includes a $900 annual tech stipend, a $250 annual professional development stipend, a $3,600 annual professional coaching stipend for leadership, and a $100 annual mental wellness stipend, along with a new-hire stipend for workspace setup and spot bonuses throughout the year.

Note: These examples reflect employee stipend programs publicly shared by each company. Benefit structures may evolve over time as organizations update their total rewards strategies.

Across these examples, the structure is consistent: companies are consolidating perks into flexible stipend programs, funding them predictably, and allowing employees to choose vendors that fit their lives. Whether delivered as a single all-inclusive LSA or layered category-specific stipends, the goal is the same: flexibility without administrative sprawl and one-off perks.

Want to see more examples? Check out “53 Examples of Employee Stipends at Leading Organizations.”

What does typical spending look like?

Check out how Compt customers use their professional development stipends

After analyzing our customers, we can see the data is clear: Delivering choice to your people matters.

Offer benefit choice with Compt

Types of employee stipends offered by companies

Compt offers 28 different stipend categories, including the following:

• All-inclusive employee stipends, also known as Lifestyle Spending Accounts (LSAs)
• Wellness stipends
• Learning and development stipends
• AI tools stipends
• Remote work stipends
• Food and grocery stipends
• Travel or experience stipends
• Family and caregiving stipends
• Cell phone stipends
• Equipment stipends
• Company swag stipends

According to our 2026 Annual Lifestyle Benefits Benchmark Report, all-inclusive LSAs are the most common type of employee stipend, with 64% of Compt customers offering an LSA. LSAs combine categories like wellness, family care, food, and personal essentials into one flexible benefit employees can use in the way that fits them best.

All-inclusive LSAs allow multiple spending categories under a single stipend policy, reducing admin overhead while increasing employee choice.

What are the benefits of employee stipends?

Recent benefits research shows that employees are reevaluating what they value most at work. Forbes Advisor reported in late 2024 that almost half of American workers are not satisfied with their benefits, and one in 10 would take a pay cut to access better ones. A separate Economist Impact study found that 70% of U.S. workers would switch jobs for a better benefits package.

This new approach to employee perks has seen a lot of media attention (and attention from HR influencers) because it solves many common problems of traditional perk programs and addresses the trends shaping the future of work.

So, what exactly are the benefits for companies and employees? Let’s dig in.

Why are stipends more flexible than point-solution benefits?

Employee stipends give your team access to the lifestyle benefits they actually want and need.

Pet insurance, in-office yoga, and financial planning services are all excellent perks, but often only a small percentage of a team can or will use them. As you already know, low utilization is a quick way to burn cash and burn yourself out (because you’re the one managing them all!).

Stipends create a flexible, personalized perk experience. Because your employees have more control over how they use the benefit, they’re more likely to engage. This makes stipends and LSAs the ultimate inclusive benefit.

That’s a budget win!

Table: Stipends vs. traditional perk vendors

Why do employees prefer stipends?

Stipends provide more value than extra money in a paycheck. In a recent employee benefits study, Fractl surveyed 2,000 employees and found that 80% would take additional benefits and perks over a pay raise.

Many of your team members want to be healthier, happier people. So they’re more likely to invest in their own well-being if you offer them a budget for it.

How do stipends simplify HR workflows compared to forms and spreadsheets?

HR no longer has to pick the “perfect perk” manage a long list of disconnected vendors. With stipends, you save time and money on implementation and ongoing administration. You can even set one up in an hour or less.

When you choose stipends, you manage one program instead of many point solutions.

With Compt, you also tap into our employee reimbursement system that supports unlimited vendors and customizable spending categories, which streamlines the process of setting up spending categories with unlimited vendors. This level of flexibility is only possible with a stipend reimbursement model.

Employees can buy what they need and get reimbursed through the platform. They can shop anywhere from major retailers like Target or Amazon to their favorite local bookstore or ice cream shop. In the past year, Compt customers made purchases across 64,000+ unique vendors, from major retailers to local businesses —without requiring HR to manage vendor contracts.

Want to see how much your perk vendors are costing you today? Visit our Vendor Calculator.

Learn more about the benefits of all-inclusive Lifestyle Spending Accounts.

Unlock the power of Lifestyle Spending accounts with our comprehensive guide on benefits and setup, plus examples from companies of all sizes.

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How do stipends support accuracy, compliance, and security?

If you’re managing stipends manually right now, you know the significant effort required to ensure accuracy, tax compliance, and the privacy and security of employee data.

When you opt for software like Compt, your CFO and IT team will be able to sleep comfortably at night knowing your perks are appropriately taxed, error-free and secure. And, they have you to thank for that.

How employee stipends are taxed (taxable vs. nontaxable)

• Some stipend categories are taxable by default (e.g., wellness, food)
• Others may be nontaxable when structured correctly (e.g., cell phone, internet)
• Reimbursement-based platforms classify expenses automatically to reduce errors

Which expenses are eligible vs. ineligible under an LSA or employee stipends?

In most employee stipend programs, eligible expenses are defined by category and verified by receipts, while ineligible expenses lack documentation or fall outside the policy. Taxability depends on the category and how the policy is structured.

The framework below breaks expenses into three buckets: commonly taxable eligible expenses, conditionally nontaxable expenses (when structured properly), and commonly ineligible expenses.

Commonly eligible expenses (taxable categories)

These categories are typically treated as taxable income and processed through payroll.

Conditionally nontaxable expenses (when structured properly)

These require clearer policy documentation and payroll coordination.

Commonly ineligible expenses

Gray areas to clarify in your policy

Some purchases fall into mixed-use territory, such as:

• Personal laptops used partly for work
• Hybrid wellness + cosmetic services
• Subscription bundles
• Shared household internet

In these cases, reimbursement-based administration creates a clearer audit trail and reduces classification errors.

Why clear eligibility rules matter

Clearly defining eligible and ineligible expenses:

• Reduces employee confusion
• Prevents payroll errors
• Protects against audit risk
• Supports Finance alignment
• Increases participation by eliminating guesswork

Most modern employee stipend programs define broad categories upfront and rely on reimbursement-based verification rather than restricting vendor choice.

How do stipends help companies reduce waste and improve utilization?

With Lifestyle Spending Accounts, companies no longer waste money on unused perks. There are no expired snacks, unused event tickets, or under-attended in-office fitness sessions.

Choosing Compt also means you don’t have to pre-fund debit cards or accounts that employees may never use. A reimbursement model ensures that the only money you pay is the money employees actually spend.

Which metrics help finance prove ROI of stipends?

Employee stipends typically outperform one-size-fits-all perks on ROI because participation is higher and employers only pay for what employees actually use. The most useful ROI metrics are participation rate, cost per engaged employee, and admin time saved.

Employee stipends deliver ROI in measurable, operational ways — not just employee sentiment. In 2026, leading HR and Finance teams evaluate stipend programs using participation, administrative efficiency, and cost-per-engaged-employee metrics.

Unlike point-solution perks that rely on vendor-reported usage, stipend ROI can be measured directly through reimbursement data and participation rates.

Core ROI metrics for employee stipends

In modern stipend programs, participation rate has become the primary performance indicator, because unused benefits generate zero ROI.

Simple ROI comparison: stipend vs. vendor-based perk

Consider this simplified example:

• A company pays $40,000 annually for a wellness vendor.
• 35% of employees actively use it.
• Cost per engaged employee = $40,000 ÷ active users.

Now compare that to:

• A $40,000 stipend budget.
• 85–93% participation (aligned with 2026 benchmarks).
• Cost per engaged employee decreases as participation increases.
• No upfront vendor contract — you keep any funds that go unused.

Because stipends are reimbursement-based, employers only pay for actual employee spending — not projected engagement.

Additional cost efficiencies

Employee stipends also improve ROI by:

• Eliminating overlapping vendor contracts
• Reducing HR administrative hours
• Avoiding prepaid debit cards with unused balances
• Simplifying payroll classification through automated tax handling

In many organizations, the time saved alone offsets a meaningful portion of the stipend program cost.

What “good” ROI looks like in 2026

High-performing stipend programs typically show:

• 80%+ participation
• 65–85% utilization depending on cadence
• Quarterly funding structure
• Broad, flexible categories
• Minimal HR time spent per month on administration

When participation is high and administrative overhead is low, stipends outperform most one-size-fits-all perk vendors on both employee satisfaction and operational efficiency.

How LSAs align with DEI and inclusion strategies

Employee stipends support inclusive benefits strategies by letting employees choose vendors and expenses that fit their geography, culture, accessibility needs, and life stage—something single-vendor perks rarely do.

Employee stipends support DEI goals by replacing one-size-fits-all perks with flexible budgets that accommodate different cultural, geographic, caregiving, and accessibility needs.

A single vendor rarely meets the needs of an entire organization. For example, a LinkedIn Learning subscription only works for certain roles and interests.

The consequences of this type of cookie-cutter point solution mean you’re investing time and resources into programs that not everybody wants or likes.

For example, stipends allow:

• Parents to allocate funds toward childcare or elder care
• Global employees to use benefits in their local currency
• Employees with disabilities to choose tools that meet accessibility needs

Stipends help companies move away from point solutions and toward flexible spending categories. For example, a “Continuous Learning Stipend” allows people to choose from LinkedIn Learning, Udemy, Coursera, extension universities, books, conferences, coaching, learning AI tools, and more.

This flexibility allows companies to design benefits programs that scale equitably across diverse workforces.

Get in touch today to learn more about professional development stipends.

How do stipends align with company mission, values, and goals?

A strategic stipend program helps companies gain a competitive edge by aligning perks with mission, values, and culture. It creates a benefits experience that reflects what matters most to the business and the people who work there.

Learn more about how real Compt customers use employee stipends.

The benefits of employee stipend management software

Why do companies use stipend management software?

If you already offer your team a stipend, awesome! You’re ahead of the curve, and you’re likely experiencing a tremendous number of benefits. High-five!

However, you’re also likely dealing with one major challenge: the admin work.

Unless you’re using software to streamline the management of your employee stipend program, you’re likely spending countless hours managing tasks such as:

• Fielding questions around which perks qualify
• Documenting which categories and vendors apply
• The approval workflow after an employee makes a purchase
• The reimbursement process once a receipt is submitted
• The IRS tax compliance of the taxable and nontaxable perks
• Communicating with employees around their remaining balances

The time spend on these tasks adds up quickly. Some companies we’ve spoken to at Compt told us they spent 20+ hours a week managing these details for a company with fewer than 200 people. That is half of one full-time employee’s week, or more realistically, a portion of several people’s time.

By contrast, Compt customers have realized real savings in time and energy:

• Quickbase reduced benefits processing time from days to 90 minutes.
• TEN7 now spends 5-10 minutes per month administering their Compt program.
• ButterflyMX achieved 100% IRS compliance, reducing the manual burden on HR and Finance.

If these administrative tasks are becoming too much, consider implementing a stipend management software like Compt.

Get 18x more employee engagement with Compt

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What do employees buy with their stipends?

Are you curious about how people spend their stipends?

Across stipend categories, employees tend to spend on everyday needs, wellness, and productivity tools rather than novelty perks, while leaving space for spending on things that bring them joy.

Here are some examples of real purchases from Compt users:

Health and wellness

• Gym memberships
• Yoga classes
• ClassPass
• Peloton subscriptions
• Fitbit and other wearable devices
• Oura ring
• Aaptiv app
• Calm app 
• Massages
• Acupuncture
• Groceries
• GLP-1 support

Learn more about health and wellness stipends.

Remote work

• High-speed Wi-Fi
• Desks, monitors, keyboards (and other items also purchasable through a one-time equipment stipend)
• Groceries, delivery, and healthy food kits
• Coffee, teas, specialty sodas, and other beverages 

Learn more about remote work stipends.

Continuous learning 

• Books (audio, Kindle, and hard copy)
• Classes and courses (e.g., Udemy and LinkedIn Learning)
• Udacity Nanodegree
• Sales or marketing courses or coaching

Learn more about educational stipends.

Family

• House-cleaning services
• Dog-walking services
• Babysitting and daycare services (e.g., Care.com)
• Elder care services and support
• Museum passes
• Meal delivery kits (e.g., Blue Apron or Purple Carrot)
• Fertility benefits

Learn more about family stipends.

AI tools

• ChatGPT Plus/Pro, Claude
• Prompt libraries and research tools
• Online courses and certifications (e.g., on Udemy, LinkedIn, Coursera)
• AI note-taking, writing, and design subscriptions (e.g., Fathom, Notion AI, Otter.ai, Granola)
• Paid AI newsletters or research reports
• Any AI solution aligned with team workflow productivity

Learn more about AI tools stipends.

Looking for an even more comprehensive list? Check out our ideas for stipend spending, including suggestions from the various other categories.

How do you know if stipends are right for your organization?

Whether you’re creating a perks program or a lifestyle benefits program from scratch or planning updates to an existing one, adding personalization to your employee benefits can help you achieve the same goals as traditional perks with more impact and less complexity.

Companies usually begin looking to employee stipends when they want to:

1.  Offer perks, but lack the time to manage various point solutions
2.  Increase utilization rates or employee satisfaction with fringe benefits
3.  Update perks to be inclusive of everyone, not just a few
4.  Support a remote or hybrid workforce
5.  Decrease the administrative burden to manage perks
6. Offer the same benefits as competitors and/or improve employer brand
7. Raise employee engagement or eNPS scores
8. Manage stipends without worrying about tax compliance or security

How to create an employee stipend program at your company

When designing your policy, you’ll also need to decide how specific categories should be structured. One of the most common design questions in 2026 involves phone and internet stipends, especially whether they should be offered as flat allowances or reimbursement-based benefits.

Example: What policy should we set for phone/internet stipends (flat vs. reimbursement)?

Flat allowances are simplest but are usually taxable. Reimbursement-based phone/internet policies provide stronger documentation and may be nontaxable when tied to business use and supported by clear policy rules.

The right structure for a phone or internet stipend depends on your company’s risk tolerance, payroll complexity, and documentation standards. In general, reimbursement-based stipends offer stronger compliance controls, while flat allowances offer simplicity.

Here’s how to evaluate the tradeoff.

Flat allowance vs. reimbursement model

When a flat phone or internet stipend may make sense

• Small teams with limited administrative bandwidth
• Fully taxable stipend design
• Low audit-risk tolerance requirements
• Situations where tracking business vs. personal use is impractical

Flat allowances prioritize simplicity over classification nuance.

When reimbursement is typically the stronger approach

• Multi-state or global teams
• Companies aiming to treat phone/internet as business expense reimbursements
• Organizations with stricter compliance or audit standards
• Finance teams that want clear documentation for tax treatment

Reimbursement-based administration provides a clearer audit trail and allows companies to define eligible expenses precisely.

What most companies choose in 2026

Many organizations structure phone and internet support as part of a broader Lifestyle Spending Account (LSA), where:

• The category is clearly defined
• Expenses are documented
• Tax treatment is automatically classified
• Employees retain vendor choice

This approach balances flexibility with compliance, especially for distributed workforces.

Ultimately, the best structure aligns with your payroll processes, documentation standards, and overall benefits strategy.

Ready to set up stipends with Compt?

Traditional perk vendors charge more and deliver less.

With Compt, you get 18x more employee engagement than the average point solution, without spending a dollar more. 

Request a demo today and see what better benefits looks like.

FAQ: Employee stipends and Lifestyle Spending Accounts

Editor’s note: Originally published in 2022, this post has been recently updated for clarity and relevance for our readers.

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.

The post The Ultimate Guide to Employee Stipends in 2026: Definition, Examples, Tax Treatment, and Policy Design appeared first on COMPT.

Lifestyle Spending Accounts (LSAs) are built for that reality. They give employees flexibility without turning benefits into an open tab: employers set the rules (categories, budgets, eligibility, and tax handling), and Finance gets reporting that holds up.

In our 2026 Annual Lifestyle Benefits Benchmark Report, we found 64% of Compt customers offered an all-inclusive LSA (up from 55% in 2024), with 93% participation and 89% utilization. The median all-inclusive LSA was funded at $1,200 per employee per year, and across all stipend programs, employers averaged $850 per employee annually.

TL;DR: What is a Lifestyle Spending Account (LSA)?
A Lifestyle Spending Account (LSA) is an employer-funded reimbursement benefit for lifestyle expenses. Employees submit receipts for approved purchases and are reimbursed through payroll with the appropriate tax treatment. In 2025, 64% of Compt customers used an all-inclusive LSA, with 93% participation and 89% utilization (Compt 2026 Annual Lifestyle Benefits Benchmark Report).

Below, we define what an LSA is, how reimbursement-based programs work, and what 2025 benchmark data suggests about benefits design in 2026.

What is a Lifestyle Spending Account?

A Lifestyle Spending Account (LSA) is an employer-funded program that reimburses employees for approved lifestyle expenses across categories the employer defines (for example: wellness, food, family support, professional development, or cell and internet).

LSAs are not pre-tax accounts like HSAs or FSAs. Most LSA reimbursements are treated as taxable income unless the specific expense qualifies for an IRS exclusion and is documented appropriately.

2025 LSA benchmarks (Compt 2026 Annual Lifestyle Benefits Benchmark Report):

• 64% of employers used an all-inclusive LSA as their primary lifestyle benefits program
• 93% employee participation
• 89% utilization of issued funds
• $1,200 median annual funding for all-inclusive LSAs
• 78% of spend taxable; 22% nontaxable
• 70% of spend across 64,000+ vendors went to local, regional, or independent merchants

What does a Lifestyle Spending Account look like in practice?

In practice, an LSA isn’t a bucket of money employees can spend however they want. It’s a reimbursement program governed by clear policies.

Employers define:

• Which categories are eligible (e.g., wellness, food, learning, or connectivity)
• How much funding is available
• Who’s eligible and when
• How expenses should be treated for tax and payroll purposes

Employees then choose eligible expenses within those rules and submit receipts for reimbursement. Because spending is reviewed against policy and reimbursed after the fact, employers avoid the common issues that come with prepaid cards and vendor marketplaces, such as unused balances, declined transactions, unclear tax timing, and limited reporting.

This structure is why LSAs scale so well. Employees get real-world flexibility without needing to change their habits or vendors, while HR and Finance keep consistent rules, predictable spend, and an audit trail for every dollar.

As programs mature, many companies move to an all-inclusive LSA that combines multiple lifestyle categories into a single framework. That consolidation reduces administrative overhead and allows benefits to adapt as employee needs change — without launching new programs each time priorities shift.

How does an LSA work?

Once an LSA is in place, the most important operational decision is how often it’s funded. Funding cadence has a direct impact on whether employees actually use their benefit.

According to Compt’s 2026 Annual Lifestyle Benefits Benchmark Report, which covers full-year 2025 LSA data from our customer base, quarterly funding produces the strongest utilization outcomes.

LSA utilization by funding cadence (2025)

• Quarterly: 85% utilization
• Semiannual: 70% utilization
• Annual: 65% utilization
• Monthly: 52% utilization
• Overall average: 67% utilization

Quarterly funding tends to work best because it aligns with how employees plan and spend. Amounts are large enough to feel usable, frequent enough to stay top of mind, and structured enough to remain predictable over time.

Annual funding is still common for categories like professional development, where expenses are larger and less frequent. Our data shows that monthly funding, while intuitive, sees less utilization because smaller amounts are easier to forget or deprioritize.

Participation vs. utilization: how Compt measures benefit performance

Participation measures the percentage of employees who submit at least one eligible expense during a funding period. Utilization measures the percentage of issued stipend dollars that are actually spent within that same period.

High participation shows that a benefit is relevant and accessible. High utilization shows that funding levels, cadence, and categories are well aligned with real employee needs.

In 2025, Compt LSAs achieved 93% participation and 89% utilization, indicating both broad adoption and enthusiastic use — not just enrollment on paper.

What are typical stipend funding ranges by category?

Stipend funding varies widely by category, company size, and program goals. To give a realistic picture of how employers are budgeting, it’s more useful to look at medians alongside minimums and maximums, rather than extremes alone. Note that these are examples, not goals.

Below are observed minimum, median, and maximum annual funding levels per employee from our 2026 Annual Lifestyle Benefits Benchmark Report, based on 2025 program data.

Why medians matter:
Maximum values often reflect outliers (such as executive-only programs or highly specialized use cases). Median funding shows where most employers actually land.

Stipend funding ranges by category (annual, per employee)

Most employers use these benchmarks as a starting point, anchoring budgets near the median and adjusting up or down based on workforce needs, priorities, and geography. Even modest funding levels can drive strong participation when benefits are tied to everyday expenses and funded on a predictable cadence.

What categories can be covered in lifestyle stipends?

Lifestyle stipends can cover a wide range of employer-defined categories, depending on how the program is structured. Common categories include wellness, food, family and caregiving support, professional development, cell phone and internet, office equipment, charitable giving, pets, and travel or experiences.

Because LSAs are reimbursement-based and policy-governed, employers define eligibility rules upfront. This allows companies to tailor categories to their workforce while maintaining compliance, reporting clarity, and budget control.

What categories do employers include in LSAs?

Lifestyle Spending Accounts are intentionally flexible, which means no two programs look exactly alike. Some employers focus on a few targeted stipends, while others consolidate multiple categories into a single all-inclusive LSA.

To understand how your peers and other companies are structuring programs in practice, it’s helpful to look at which stipend categories employers actually offer, not just what’s theoretically eligible.

Percent of companies offering each stipend category (2025)

Rooted in Compt’s 2026 Annual Lifestyle Benefits Benchmark Report, here’s how often each stipend category appears across employer programs:

Source: Compt 2026 Annual Lifestyle Benefits Benchmark Report (full-year 2025 data)

The chart below visualizes how often each stipend category appears across employer programs. (For those of you who prefer it this way!)

What this data shows

Rather than expanding benefits one category at a time, employers are increasingly consolidating support into all-inclusive LSAs. While individual stipends like wellness or office equipment are still common, the dominant trend is toward fewer one-off programs with broader coverage.

This approach simplifies administration, improves participation, and allows benefits to adapt as employee needs change, all without launching new stipends every time priorities shift.

Common stipend categories employers include

Employers don’t add categories at random. The most common LSA categories are those that combine broad relevance with predictable spend and clear eligibility rules. These categories consistently appear across programs of all sizes and are often bundled into all-inclusive LSAs.

For instance, if your LSA includes a wellness category, employees can use it for a broad range of purchases, such as:

• Gym memberships (Equinox, Planet Fitness)
• GLP-1 support (where permitted by employer policy and administered appropriately)
• Personal training sessions
• Exercise equipment
• Yoga, Pilates, and spin classes
• Fitness apps, and subscriptions (Peloton, ClassPass, Apple Fitness+)
• Nutrition counseling or weight loss programs
• Meditation and mindfulness apps (Calm, Headspace)
• Coaching
• Therapy and counseling services, including online options
• Financial planning
• Personal trainers
• Biometric screening
• Massage therapy and acupuncture

You can then add other spending categories to make your LSA more comprehensive and inclusive, including:

• Professional development
• Company swag
• Meals and food
• Family
• Commuting
• Pets
• Equipment
• Cell phone
• Internet
• Charitable giving
• Travel and experiences

What unusual or creative perk categories can be included in an LSA (pet care, donations, etc.)?

Beyond standard categories like wellness or professional development, LSAs can include more creative or values-driven perk categories. Employers commonly add pet care, charitable donations, cultural experiences, travel stipends, sabbaticals, “Treat Yourself” allowances, and company swag.

Because categories are employer-defined, LSAs allow organizations to reflect company culture, employee feedback, and evolving priorities without adding separate vendors or new benefit programs. This flexibility is one reason all-inclusive LSAs have become the dominant operating model for lifestyle benefits.

Other popular reimbursed items from select categories

Professional development

• Online courses (Coursera, LinkedIn Learning, Udemy)
• AI tools and productivity software
• Conferences and industry events
• Certifications and licensing fees
• Tuition for degree or non-degree programs
• Books and learning materials
• Coaching or mentorship programs
• Language learning apps (Duolingo, Babbel)

Family support

• Childcare and daycare expenses
• Babysitting and nanny services
• Fertility treatments and IVF support
• Adoption and surrogacy-related costs
• Elder care and in-home support services
• Parenting classes or support programs

Meals and food

• Meal delivery services (HelloFresh, Blue Apron)
• Grocery purchases
• Office snacks for remote employees
• Restaurant meals during business travel
• Meal stipends for late work hours or shift workers

Travel and experiences

• Museum and zoo memberships
• Theater, concert, or movie tickets
• National park passes or ski lift tickets
• Airbnb or hotel stays
• Airline and train travel for personal enrichment or remote work
• Family passes to theme parks (e.g., Disney, Universal)
• Local experience gifts (via ClassPass, Airbnb Experiences, etc.)

Need help crafting the right LSA for your team? Chat with an expert at Compt.

Benefits of a Lifestyle Spending Account (LSA) from Compt

Lifestyle Spending Accounts perform well because they balance employee choice with clear structure. Instead of scattering budget across one-off perks that are hard to manage and easy to underuse, employers consolidate support into a single program that’s predictable, explainable, and widely used.

LSAs help employers consolidate benefits without sacrificing flexibility.

Traditional perks often grow by addition: a wellness vendor here, a learning stipend there, a marketplace on top. Over time, this creates complexity without improving outcomes.

LSAs reverse that pattern. As shown earlier, 64% of employers on the Compt platform now run lifestyle benefits through an all-inclusive LSA, using one governed framework to support multiple categories. Employees still choose what matters to them, but HR and Finance manage fewer programs with clearer rules.

That’s just good benefits infrastructure.

LSAs address real gaps left by traditional benefits.

Health insurance remains essential, but it doesn’t cover many of the costs that shape employees’ day-to-day well-being. LSAs are increasingly used to support areas health plans don’t adequately address, such as family and caregiving needs, food and everyday wellness expenses, or emerging categories like GLP-1 medication support.

Because categories are employer-defined, companies can offer intention support without turning lifestyle benefits into an open-ended expense.

LSAs drive high participation and utilization.

LSAs consistently outperform traditional perks on engagement. In 2025, LSA programs reached 93% participation and 89% utilization, meaning employees actively used the benefits offered to them.

That performance reflects two core design choices:

• Benefits tied to everyday needs and moments of joy rather than niche perks
• Predictable funding cadences that make benefits easy to plan around and use

LSAs reduce administrative overhead for HR.

Managing perks through multiple vendors requires ongoing maintenance: eligibility checks, annual renewals, employee questions, and manual tracking. That work compounds as teams grow or become more distributed.

LSAs simplify this by centralizing lifestyle benefits under one set of policies and workflows. HR teams set budgets and rules once, then manage programs with significantly less manual effort (regardless of whether they support 100 employees or 10,000).

Learn how Jellyvision reduced lifestyle benefits admin time to one day of work per quarter.

Read the case study or this blog from their former CPO.

LSAs reinforce company values in a scalable way.

Because categories are configurable, LSAs give employers a practical way to reflect their priorities. A company that values learning can emphasize professional development. A company focused on well-being can prioritize wellness and caregiving support.

Compt customer ButterflyMX took this approach by surveying employees and launching a single, all-inclusive “Self-Care Stipend” with 12 categories. The result was 94% employee participation, showing that one well-designed program can support diverse needs without creating complexity.

LSAs align with DEI and inclusion strategies.

LSAs support DEI strategies by shifting from one-size-fits-all perks to structured flexibility. Instead of offering benefits that only resonate with a narrow employee segment, LSAs allow individuals across different life stages, cultures, family structures, and geographic locations to use funds in ways that are personally relevant.

For example, caregiving support may matter most to employees supporting children or aging relatives, while professional development or AI tool stipends may resonate with early-career or technical employees. By offering equitable access to flexible support rather than rigid, vendor-specific perks, LSAs help employers design benefits programs that are inclusive by structure.

LSAs are a benefit that works for employees and employers.

For employees, LSAs provide choice, relevance, and fairness — benefits that fit real lives instead of forcing behavior through rigid vendors. For employers, they offer controlled spend, high engagement, and a structure that’s easy to explain internally.

That combination is why LSAs have become a core part of modern benefits strategy infrastructure, rather than another perk layered on top.

Disadvantages of Lifestyle Spending Accounts (LSAs)

Lifestyle Spending Accounts aren’t a fit for every organization in every scenario. Understanding the tradeoffs — particularly around tax treatment and administration — helps teams decide whether LSAs make sense and how to design them responsibly.

LSAs often include taxable benefits.

Most LSAs include a mix of taxable and nontaxable categories. Common examples include:

• Taxable: wellness, family and caregiving support, food, travel and experiences, pet care
• Nontaxable: professional development, student loan repayment (subject to IRS limits, up to $5,250 per year), and internet or cell phone reimbursements when used for work

According to Compt’s 2026 Annual Lifestyle Benefits Benchmark Report, 78% of total stipend and LSA spend is taxable, a ratio that has remained stable year over year. This reflects how employees actually use LSAs: they prioritize what they need, even when some expenses carry tax implications.

Accurate tax treatment is critical.

Tax handling is where LSAs can create risk if they’re poorly administered. Applying tax treatment incorrectly — or too late — can result in unexpected withholdings for employees, which undermines trust in the benefit. On the employer side, covering taxes through gross-ups without clear visibility can introduce unplanned costs that Finance teams aren’t expecting.

The key is transaction-level accuracy. Tax treatment should be applied at the time of spend, based on the specific expense and documentation, not retroactively at year-end.

How Compt mitigates these risks.

The challenges above aren’t inherent flaws in LSAs — they’re implementation issues. With the right platform, taxable and nontaxable expenses can be managed predictably and transparently.

Compt is built to address these risks directly. Its reimbursement-based model automatically categorizes expenses, applies the correct tax treatment at the transaction level, and syncs results into payroll with clear reporting. That structure makes LSAs easier to explain, audit, and adjust as programs evolve.

As a result:

• Employees avoid surprise tax withholdings
• HR teams spend less time on manual review and reconciliation
• Finance gains consistent, real-time visibility into program costs

In practice, what’s often labeled a “disadvantage” of LSAs becomes a manageable design consideration. With proper structure and tooling, companies can offer flexible, high-engagement benefits without sacrificing control or compliance.

Real quotes on how Compt LSAs improve lives

Employees often share with our customers how life-changing their LSA programs have been, helping them feel more supported, balanced, and seen in their everyday lives.

Below are real stories and quotes from Compt users highlighting the powerful impact Lifestyle Spending Accounts can have when people are given the freedom to choose what matters most to them:

• “I exercise regularly, but this gives you extra motivation to go a little more!!”
• “I have never worked for a company that I’ve felt so appreciated.”
• “The benefits take a bit of the edge off of life’s large purchases — like tires to get safely to work!”
• “They are helpful with heating and cooling bills for my family.”
• “I have used it to cover expenses for my puppy.”
• “I like that my employer does this program. With the inflated prices this is a godsend!”
• “We have had so many fun family outings with this benefit :)”
• “The Compt benefits make me feel more free to book a hotel that’s just a little nicer than usual once in a while :)”
• “Able to obtain protein shakes and supplements that contribute to my overall health, wellness, and weight loss/maintenance.”
• “I am able to afford a membership to the YMCA for my family.”
• “We are already living paycheck to paycheck and this helps to buy essentials for our children. Thank you!”
• “With the high cost of getting groceries, it has helped to almost cover one weekly trip.”
• “It’s easy to upload a screen shot of a receipt to access my benefits through Compt.”
• “I love it — It feels like cash that I can spend on something special for me instead of adding to the family budget.”
• “Its been a great perk! This just feels like a gift every 3 months.”
• “They help offset costs for unexpected needs and offer me the opportunity to enjoy life without the financial worry.”
• “YES! I am able to buy a yoga punch pass. Yoga is my anti-depressant :)”
• “It helped me get a standing desk! About to follow up with a walking pad. Hopefully these will help me get healthier!”
• “They help with little extras here and there that I otherwise would not be able to provide my family.”
• “The benefits inspire you to not only take care of yourself and grow, but that you are appreciated.”

7 companies offering LSAs with Compt today

We’re constantly inspired by the incredible HR and People teams using Compt to offer flexible lifestyle benefits and personalized perks to their employees. Honestly, getting to witness the care and creativity these teams pour into supporting their people? That’s one of our favorite perks.

At Compt, we believe people do their best work when they feel supported and can thrive in inclusive environments — and we see that belief come to life every day through our customers.

One thing that stands out: when a company introduces a Lifestyle Spending Account (LSA), they typically see very high utilization across their team. (By “utilization,” we mean the percentage of stipend dollars actually used. So if a program has 80% utilization, that means employees are using $0.80 of every dollar offered.)

Below are some of the creative and impactful LSA and stipend programs companies are running with Compt, all with utilization rates of 85% or higher:

1. PDI Technologies

Industry: Software technologies

Stipends offered: 

• Work anniversary
• Birthday stipend
• LSA program

2. Jenni Kayne

Industry: Retail

Stipends offered: 

• $500 per year all-inclusive stipend
• Special callout: Branded the all-inclusive stipend internally as “The Live Well Stipend”

3. TCL Marketing

Industry: Advertising services

Stipends offered: 

• $720 annual internet stipend for executives 
• $3,120 annual all-inclusive stipend for directors
• $1,920 annual all-inclusive stipend for managers/supervisors
• $1,920 annual all-inclusive stipend for seniors/coordinators
• $1,320 annual all-inclusive stipend for technicians
• $125 per quarter health & wellness stipend
• Special callout: All-inclusive stipend amounts vary depending on the role

4. Cantina (formerly Aircore)

Industry: Software development

Stipends offered: 

• $500 per month all-inclusive LSA stipend
• Special callout: Using stipends as a spot bonus

5. Polyvinyl

Industry: Music

Stipends offered: 

• Full-time and part-time all-inclusive stipend 
• $300 per quarter for full-time employees
• $150 per quarter for part-time employees
• Special Callout: Both full-time and part-time employees get the stipend!

6. StackRabbit

Industry: Advertising services

Stipends offered:

• $500 per quarter for all-inclusive LSA stipend

7. Bovitz

Industry: Market research

Stipends offered: 

• Spot bonus – charitable giving
• $860 per quarter all-inclusive stipend
• Special callout: Charitable giving stipend to go along with their Community retreat 
  

Inside one company’s LSA program

Consider Column, a Compt customer. After raising $30M in Series A funding, Column focused on growing its remote-first team, which created the need for flexible, location-agnostic benefits like a Lifestyle Spending Account (LSA) that could meet the varied needs of a distributed workforce.

They partnered with us for maximum flexibility, allowing them to offer stipends that included a one-time new hire tech stipend, quarterly technology productivity stipends, and a comprehensive “healthy and whole” stipend.

After launching Compt, 98% of employees reported being happy with Column’s benefits package overall.

Giving employees control over their spending promotes a healthy work-life balance. Happier employees translate to higher employee engagement and more success within your company. 

“Compt helps our team members to be aware of the stipends that we’re offering and empowers them to make the choices that make the most sense for them and their loved ones.” 
— Melissa Theiss, Head of People Operations, Column

How to get started with LSAs

Interested in setting up your own Lifestyle Spending Account program? Here are the steps you can take.

1. Identify your number of employees and total budget for LSAs.

Start by counting the number of employees you have and creating a total budget for all of the Lifestyle Spending Accounts you’ll be providing. You can benchmark against what other companies in your industry are doing to ensure your package is competitive.

According to Compt’s 2026 Annual Lifestyle Benefits Benchmark Report, employers fund an average of $850 per employee per year across all stipend programs, with median funding for all-inclusive LSAs at $1,200. Budgets also vary significantly by company size; in 2025, average annual funding per employee was:

• $1,675 at companies with fewer than 100 employees
• $1,055 at companies with 100–1,000 employees
• $649 at companies with 1,000+ employees

Use these benchmarks as a planning baseline, not a target. Most teams anchor near the typical range for their size, then adjust based on workforce needs, chosen categories, and funding cadence.

2. Determine how much to spend per employee and on what timeframe.

Next, decide your funding cadence. How often you fund an LSA influences how employees plan for and use the benefit.

Compt’s 2026 Annual Lifestyle Benefits Benchmark Report shows that quarterly funding is the most reliable default, producing the highest utilization across programs. Quarterly amounts are large enough to feel usable, frequent enough to stay top of mind, and predictable for budgeting.

Annual funding is still commonly used for categories like professional development, where expenses are larger and less frequent.

3. Select categories for employees to spend in.

Choose categories that reflect your company’s values and employee needs. Many employers include wellness, food, and family support, but you can also add professional development (including stipends for AI tool subscriptions), remote work, company swag, or even “Treat Yourself” stipends. All-inclusive LSAs, which bundle multiple categories into one program, are now the single most popular design

4. Select a vendor like Compt, the best overall LSA solution for personalization and compliance in lifestyle benefits.

Compt is a lifestyle benefits platform built to help companies offer personalized, meaningful perks without the complexity. Instead of forcing HR teams to juggle multiple tools or locking employees into a rigid marketplace, Compt gives people the freedom to spend their stipends in ways that fit their lives. Employees have the freedom to use stipends within the categories you define, buying from any merchant that fits.

At the same time, HR and People Ops stay firmly in control with programs that are inclusive, easy to manage, and flexible enough to grow with your team.

Where Compt really shines is behind the scenes, for HR and Finance alike. Designed by a former CFO and COO, it delivers real-time visibility into spending patterns, automated tax classification, seamless payroll integrations, and global currency support. No merchant code issues. No embarrassing card declines. No year-end tax surprises for employees or employers. Just a smart, scalable platform that keeps employees happy, HR confident, and Finance in control.

Some key benefits of Compt:

• 100% tax-compliant: IRS and local tax rules are built in.
• No prefunding: You only pay for actual employee purchases.
• Personalization: Employees can choose what matters most to them, from a local yoga class to groceries for their family.

Psst: Learn more about how to evaluate the pros and cons of LSA vendors.

5. Communicate with your team.

Once you set your LSA up, it’s time to communicate clearly with employees. Include details such as:

• How much each employee receives
• The timeframe for spending and whether funds roll over
• Any maximum rollover or forfeit dates
• Which categories are included
• How to submit expenses
• Any tax implications
• Where to go for questions

Open communication with your team is one of the most important steps in making your LSA program a success.

Ready to explore Lifestyle Spending Accounts? Request a Compt demo today.

FAQs: Lifestyle Spending Accounts (2026)

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.

The post What Is a Lifestyle Spending Account (LSA)? 2026 Employee Benefits Guide appeared first on COMPT.

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.

Benefits of Cell Phone Stipends

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.

1. Microsoft

They provide their employees with a monthly reimbursement of $75.

2. Google

They provide a cell phone stipend of $70 per month.

3. Dropbox

• $100 a month for cell phone
• Perks allowance to “empower employees to customize their benefits in line with what really matters to them.”

4. Stripe

Stripe offers its people a $50 monthly stipend toward their cell phone service.

5. Okta

Okta reimburses full-time employees up to $200 per month for their personal cell phone and internet service.

6. Buffer, a fully-remote company.

Buffer offers several perk stipends:

• $200/month for “Working Smarter” stipend for coffee shop working purchases
• $500/teammate for home office set-up
• $200/year for tech/office needs
• Internet reimbursement stipend
• $850/year continuous learning stipend

Check out this in-depth post to learn more about Buffer’s stipend program.

7. Lyft

Lyft offers its staff $60/month ($720 a year) cell phone reimbursement.

8. Circle

Circle offers its employees a $150/month monthly stipend to use on their cell phones.

9. NerdWallet

NerdWallert offers everyone a WFH stipend to deck out their remote Nerds’ home offices and a wellness stipend for personal wellness.

10. Strava

The Strava workforce is eligible for a $1,000 annual gear stipend, but claim reimbursements must be for mobile phone expenses and gym 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.

Schedule a Demo

‘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.

Read more:

• BYOD, CYOD, COPE, COBO – What Do They Really Mean?
• BYOD Policy Basics: 5 Questions to Help You Get Started

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.

How Much Should You Offer?

Data from our 2025 Lifestyle Benefits Benchmarking Report reveals the minimum amount being offered at $480/year, or $40 per month, which aligns with the average cost of a cell phone plan in the U.S. In fact, cell phones ranked as the 6th most popular category by total employee spend.

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).

Below are some of the popular types of stipends:

• Commuter stipend
• Equipment stipends
• Family stipends
• Internet stipend
• Learning & development stipend
• Meal or food stipends
• Pet care stipends
• Productivity stipends
• Remote work stipend
• Student loan stipends
• Charitable giving
• Travel & experience stipends
• Anniversary bonus
• 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.

The post Cell Phone Stipends: Everything You Need to Know appeared first on COMPT.

This isn’t a surprise. Companies often find themselves offering wellness perks that, despite good intentions, end up feeling disconnected from what employees really need.

The truth is, many employees today want more than a simple gym membership, a meditation app subscription, or some other one-size-fits-all wellness benefit. They want flexibility, personalization, and a program that truly aligns with their lives.

Forward-thinking benefits leaders are responding. The 2025 Benefits Trends research from WTW shows employers are actively recalibrating programs to deliver more value amid cost pressure, and SHRM’s 2025 Benefits Survey confirms continued adoption of flexible benefits like wellness stipends and LSAs.

Health costs have also entered the conversation in a big way. The 2024 Employer Health Benefits Survey from KFF reported average family premiums at $25,572 (up 7% YoY), and Mercer projects a 6.5% employer cost increase in 2026 even after cost-management steps (and up to ~9% without them).

With the current state of the world, the winning strategy is to give your entire workforce the freedom to take charge of their own health and wellness, all while saving your company money. But how do you build a program that checks all those boxes?

We developed this guide to everything you need to know about today’s top employee and employer benefit: health and wellness stipends.

What is a health and wellness stipend?

First, a definition:

A health and wellness stipend is an employer-funded allowance that reimburses employees for eligible well-being expenses.

Depending on how a company designs their health and wellness stipend program, eligible expenses can include a wide range of wellness-related items and services, including gym memberships, mental health apps, fitness subscriptions, wearable fitness trackers, and more.

Further details on health and wellness stipend programs:

• They are sometimes also referred to as health stipends, wellness accounts, wellness allowances, well-being allowances, wellness spending accounts, wellness reimbursements, wellness wallets, and wellness dollars.
• Employers decide how much to offer and on what cadence (such as a monthly, quarterly, semiannual, or annual basis) employees can spend.
• The type of wellness program an employer designs will determine what expenses are eligible, including physical, mental, or financial wellness needs.
• They are taxable health benefits, which means they have tax implications for either the employee or employer (i.e., taxes will be covered by employees if not grossed up by the employer).

What they are not:

• Health Savings Account (HSA)
• Health Reimbursement Arrangement (HRA)
• Individual Coverage Health Reimbursement Arrangement (ICHRA)
• Flexible Spending Account (FSA)
• A health insurance stipend
• A stipend that is reimbursed through a typical business expense software

What is a wellness wallet?

A wellness wallet is a modern way to describe a flexible, employer-funded pool of money employees can use for wellness-related expenses. “Wallet” usually implies the benefit is managed in a digital platform (with guardrails like eligible categories, documentation requirements, and reporting) rather than as a single vendor perk.

In practice, a wellness wallet can be delivered in one of two ways:

• Reimbursement-based funding (employees submit a receipt and get reimbursed through payroll)
• A stored-value card or payment method (depending on the provider and how the program is structured — Compt does not recommend this model)

Either way, employers still define what’s eligible and how spending is documented.

Most employers use the term “wellness wallet” interchangeably with wellness stipend or a wellness allowance. The difference is typically branding and administration, not the intent: flexible, employee-driven well-being support.

What is a wellness account for employees?

A wellness account for employees is an employer-sponsored benefit that sets aside funds employees can use for eligible well-being expenses (like fitness, mental health, or other wellness categories defined by the employer).

Despite the word “account,” this is not the same thing as an HSA, FSA, or HRA. In most cases, wellness accounts are post-tax / taxable benefits because they reimburse personal wellness expenses that don’t qualify for pre-tax treatment. Employers define what’s eligible, how often funding is provided, and what documentation is required.

To discover which method of delivering wellness support would work best for your company, read our deep dive, “15 Best Lifestyle Spending Account Providers in 2026.”

Invest in employee well-being with a wellness stipend.

(Compt customers see 95% activation and 93% participation among active users!)

Schedule a demo

Overall benefits of health and wellness stipends

If you don’t currently offer a health stipend to your employees, you might be wondering, “Why do employers offer wellness programs to their employees?”

Because wellness is no longer a nice-to-have — it’s an expectation.

Compt’s 2026 Annual Lifestyle Benefits Benchmark Report shows that all-inclusive Lifestyle Spending Accounts (LSAs) have become the default way employers run lifestyle benefits. In 2025, 64% of Compt customers offered an all-inclusive LSA, up 9% since 2024 — a clear shift toward consolidating scattered perks into one flexible program.

And prioritizing your employees’ health and wellness doesn’t only benefit them — it also benefits you.

Companies with programs supporting employee well-being have higher retention rates, productivity levels, and overall job satisfaction. And CEOs agree. According to 2025 data from Wellhub, 58% of CEOs say well-being is critical to financial success.

As an employer, your employees’ health and wellness have to be the top priorities. According to Personify Health’s 2024 Employee Health and Productivity Report:

• Two-thirds of employees struggle with work-life balance.
• 22% said poor social well-being negatively affected their job performance.
• 55% reported a decline in job performance because of financial health worries.
• And, sadly, only half of employees feel that their health and well-being programs are enough.

And when employers offer flexibility through stipends? Engagement, appreciation, and health outcomes skyrocket.

In Compt’s 2026 Annual Lifestyle Benefits Benchmark Report, health and wellness remains one of the top stipend categories: 37% of Compt customers offer it, and wellness is included in 99% of broader Lifestyle Spending Accounts (LSAs), which shows how often well-being is baked into modern flexible benefits design.

And structure changes outcomes. In the 2026 Annual Lifestyle Benefits Benchmark Report, standalone wellness stipends reach 70% utilization (employees spend $70 for every $100 allocated) with 85% participation. All-inclusive LSAs — which often include wellness as a default category — reach 89% utilization with 93% participation. The takeaway: consolidation doesn’t just simplify administration; it tends to drive higher engagement and stronger spend efficiency.

Employee benefits of health and wellness stipends

Employees are healthier and happier when wellness choices are offered.

According to the 2025 Global Benefits Trends Survey from WTW, companies that emphasize employee well-being see 25% higher retention and significantly greater engagement scores than those that don’t. Similarly, Gallup’s State of the Global Workplace 2025 found that employees who feel supported in their overall well-being are twice as likely to say they plan to stay with their employer for at least the next 12 months.

That’s why more employers are moving away from prescriptive wellness perks and toward flexible, personalized, employee-led programs.

Stipends like the ones Compt offers put the power of choice in your employees’ hands.

A dedicated health and wellness stipend supports them to choose what being “healthy” means to them, and, more importantly, how they can achieve their own version of wellness.

Stipends evolve alongside your people.

Stipends offer benefits personalization and evolve alongside your people. How employees get healthy and stay well naturally changes over time as their lives and priorities shift.

From fertility to elder care, health and wellness stipends delivered through Compt LSAs flex with every stage of life and every market you hire in.

Think about it: do you have the same wellness goals or habits you did 10 years ago? Probably not. The same goes for your people.

Employer benefits of health and wellness stipends

Wellness stipends improve retention.

Gallup’s 2025 State of the Global Workplace report estimates that low engagement and poor well-being cost the global economy $8.9 trillion annually in lost productivity (roughly 9% of total global GDP). Burnout and disengagement are among the top drivers of that loss, showing just how directly employee well-being ties to business performance.

While providing stipends to employees may not be obligatory, the most successful companies are already on board. They understand it’s not just about the monetary value of the stipend (though, let’s be honest, that part is pretty awesome) — it’s about the message it sends: a genuine commitment to supporting each person’s unique needs.

That authenticity is what attracts and retains top-tier talent in today’s market.

Health and wellness stipends save you money and drive value and ROI.

There are many ways that a stipend approach to wellness can help your company save money, especially in a year when every budget line is under review (if not scrutiny).

Instead of maintaining multiple single-use vendor contracts for fitness, mindfulness, nutrition, and family perks like one-off fertility benefits, employers are future-proofing their benefits by consolidating into one Lifestyle Spending Account (LSA) or flexible wellness stipend. It’s a simple shift: cut 90% of what you’re offering, roll those dollars into a smaller, more inclusive stipend, and everyone wins.

Additionally, leveraging the stipend approach will save money.

When employers select specific perks for employees, employees aren’t likely to use them because they’d not what they’d prioritize or purchase given the opportunity to pick for themselves. Only 28% of employees surveyed by benefits broker NFP report making maximum use of perks and benefits because of “the misfit of benefits offered versus what is valued.”

Instead of chasing utilization across dozens of niche programs, an LSA or wellness stipend consolidates spend into one measurable, flexible framework. It eliminates duplicate vendors, streamlines reimbursements, and gives Finance one predictable, trackable line item.

That efficiency makes health and wellness stipends and LSAs a rare kind of budget win: saving money doesn’t have to mean cutting impact for your people.

They’re the smarter, more strategic way to offer benefits today.

The old way of administering health and wellness perks and benefits isn’t working anymore.

As the workplace has evolved, so have employees’ needs — and the old model of one-off point solution wellness benefits isn’t keeping up.

Without a flexible program that meets your people where they are in life, dollars are wasted and employees are left frustrated (and unsupported).  

That’s why we built Compt — to help companies offer more meaningful choice to their people, deliver greater value to the business, and do it all without increasing spend. And it’s working too. With Compt, customers get 18x more employee participation rates than traditional point solution wellness vendors.

Stipends are easier to manage and fully tax-compliant.

Gone are the days of HR juggling various health and wellness vendors, on top of every other employee benefit vendor. The stipend approach empowers employees to take control so they can get exactly what they want (and with Compt, HR leaders manage the whole process in 30 minutes a month).

When evaluating lifestyle benefits software, prioritize solutions that are fully tax-compliant. This will not only win over your CFO and leadership team, but also save your HR team valuable time by eliminating manual spreadsheets, being prepared for tax-season and audits, and reducing the risk of costly errors.

15 companies offering wellness stipends today

Based on research, conversations, and market trends, one thing is clear:

The companies that achieve the most productivity and success are the ones that are the most innovative, most focused on employees’ needs, and most driven to help their employees succeed at work and in life.

Companies offering health and wellness stipends include:

Which expenses are reimbursable in a wellness stipend?

A common question people ask us is, “What expenses can be reimbursed under a wellness stipend, and what are they used for?”

You can reimburse a variety of wellness-related expenses that support an employee’s mental or physical health, including:

• Gym or fitness memberships
• Personal trainer or training sessions
• Fitness classes (e.g., yoga, kickboxing, CrossFit, F45)
• Health and wellness coach
• Home exercise equipment (e.g., treadmills, yoga mats, weights, foam rollers)
• Wearable fitness trackers (e.g., Fitbit, Whoop, Oura ring)
• Weight loss programs or nutrition classes
• Physical therapy sessions
• Chiropractic care
• Massage therapy
• Acupuncture sessions
• Health screenings or diagnostic tests not covered by insurance
• Healthy meal delivery services or pre-made meals
• Fitness books or programs
• Counseling services
• Health coaching
• Healthy snacks and other food-related items (e.g., cookbooks, water bottles, juicers)
• GLP-1 weight-loss prescriptions
• Fitness and motivation programs or mobile apps
• Mental health services and apps
• Meditation apps or courses
• Health supplements or herbal teas
• Aromatherapy oils or sprays
• Sleep improvement products or tracking apps
• Weighted blankets or blackout curtains for improved sleep
• Sound therapy or white noise machines
• Journals or guided-journaling tools/apps
• Breath work or EFT tapping support
• Self-care items (e.g., eye masks, headache wraps, infrared lights)
• Smoking cessation programs
• Any other physical or mental expenses that you deem eligible for expense reimbursement

Learn more about ways to use a wellness stipend in this post, or, if you’re ready, request a demo with Compt.

Groceries as a wellness benefit

Groceries have become one of the most flexible and impactful ways employees use their health and wellness stipends. As food prices outpace both wages and public assistance programs, nutritious meals have become harder for many households to afford consistently. Expanding wellness stipends to include groceries acknowledges that well-being starts with access to healthy food, not just gym memberships or fitness apps.

Food benefits have also evolved quickly. While only a small percentage of employers offer food as a standalone stipend, it ranks as the top category paired with wellness stipends and appears in more than 90% of Lifestyle Spending Accounts (LSAs). This reflects a broader definition of wellness: one that recognizes that balanced meals and grocery essentials contribute as much to overall health as exercise or mindfulness programs.

Food benefits have evolved quickly as employers broaden what ‘wellness’ can include. In Compt’s 2026 Annual Lifestyle Benefits Benchmark Report, food stipend funding ranges from $160 to $5,020 per employee per year, with a median of $480 — a useful planning benchmark for teams that want to offer practical, everyday support without overengineering the program.

Employee behavior reinforces why this matters: nearly 1 in 10 stipend dollars is now spent at grocery retailers, and grocery/household essentials vendors show up repeatedly among top spend destinations.

Broadening health and wellness stipend eligibility to include groceries helps employers make wellness benefits more inclusive, practical, and relevant to the realities employees face today.

Real employee quotes about their impact

Below are real quotes and stories from Compt users highlighting the powerful impact their company’s wellness stipend has had on their lives. From supporting mental health and physical fitness goals to creating a stronger sense of personal agency, these stipends are more than just perks, they’re meaningful investments in employee well-being. Each story reflects how wellness reimbursements make people feel more supported.

• “I am able to buy a yoga punch pass. Yoga is my anti-depressant :)“
• “It has allowed me to participate in regular exercise programs that I normally would not have attended due to the cost.“
• “It is a huge relief to have help purchasing necessary medical device that is not covered by insurance.“
• “Compt helps me to make sure I always have time and money put aside for my health and wellbeing regardless of pay.“
• “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!!“
• “Trying to get caught up on my medical expenses is very difficult. I pay almost $200 a month. The stipends do help out.“
• “I’m able to obtain protein shakes & supplements that contribute to my overall health, wellness and weight loss/maintenance.“
• “It encourages me to keep going to pilates which helps my body and spirit.”
• “I am acquiring a First Aid certificate.“
• “It has enabled me to finally start losing weight!“
• “Without it, I wouldn’t have been able to afford a gym membership! Ty.”
• “Just began using this for my yoga membership.“
• “Thank you. I am able to afford a membership to the YMCA for my family.“
• “It’s that extra little push to keep the wellness aspect of our lives moving forward.“
• “I was able to pay my co-payments for my physical therapy. Thank you“
• “Helps pay my medical bills.”
• “I love being able to use my stipend to help cover my gym costs.”
• “It’s been helpful in buying running and/or tennis shoes for workouts.”
• “I regularly exercise at the gym with the help of of our Compt stipend.“
• “I use my chiropractor/massage vists for my reimbursements. To get assistance with these treatments is wonderful!“
• “Lightens the burden of paying for exercise — wonderful.“
• “I’ve been able to work out and enjoy life WAAAAAY more!“
• “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.“
• “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.“
• “My daily work requires a lot of physical activity, so I’m able to stay focused and physically active.“
• “I got myself a Fitbit!“
• “I am struggling with sciatica pain and the benefit helps me pay for the chiropractor. Thank you!“

Compt’s reimbursement-first design provides structure and compliance, which companies need, without limiting employee choice. This makes it both flexible and compliant. And as the quotes above show, the impact goes far beyond process: it’s deeply human.

What we’re most proud of is how Compt’s model makes this kind of impact not just possible, but easy. Here are a few of our favorite themes that we notice from the quotes above and what we hear from HR customers:

• Reimbursement makes previously out-of-reach options feel accessible and achievable.
• Employees are preventing burnout, injury, and illness, not just reacting to it.
• The reimbursement model provides true flexibility across medical, mental, and holistic wellness
• Compt isn’t just enabling behavior, it is reinforcing consistency.
• Our model centers the employee’s definition of well-being.
• Reimbursement isn’t just a transaction. It’s a signal of trust and respect.

With Compt, companies can move beyond generic one-size-fits-all approaches and into something that’s personalized, appreciated, and lasting.

Inside one company’s health and wellness stipend

Below is an example of a health and wellness stipend from a real-life Compt customer.

Our customer gives their team members a $200/month wellness reimbursement to support a healthier lifestyle. After analyzing their team’s stipend data, they noticed employees selected many different types of health perks (as seen below):

Their team bought 36 unique health and wellness-related perks and signed up for memberships at 22 different gyms!

This is the magic of what happens when you offer your people a health and wellness stipend — employees can choose the vendors they want without burdening HR/Finance.

Is a wellness stipend taxable?

Yes, health and wellness stipends are a taxable benefit.

SHRM covered this topic in a piece titled, “IRS Reminds Employers: Wellness Incentives Are Taxable,” and had this to say on the topic:

Wellness stipends are typically considered taxable income by the IRS because they’re not classified as qualified, tax-free benefits under Section 213(d) or other pre-tax benefit rules.

This means that if you give your employees a $100 wellness stipend to cover a gym membership, meditation app, or alternative therapy session, the IRS views that $100 as additional income, just like wages or a bonus. And thus, it must be reported and taxed accordingly.

There are two ways companies can properly account for taxes. Let’s look at an example featuring a $100 monthly health and wellness stipend:

Because wellness stipends are taxable income, it’s important to pick a software solution that ensures taxes are accounted for and included in their regular paychecks, so employees don’t get hit with an unexpected tax bill down the line.

This is different from pre-tax benefits like health insurance premiums or HSA contributions, which are sheltered from taxes under specific guidelines. Learn more in our guide to taxable and nontaxable fringe benefits.

There is an exception to the tax rules above that make some taxable awards nontaxable, and that is the “de minimis award” rule. The IRS defines a “de minimis fringe” award as:

Which means a company-provided gym membership is taxable, but giving employees a branded pen isn’t.

If you’re looking to offer your people a tax-compliant wellness stipend, a stipend reimbursement platform like Compt is an ideal choice. With Compt, organizations create and manage every detail of their wellness stipend (or any stipend program).

Schedule a call with a stipend expert today.

How to create a wellness stipend with Compt

With Compt’s intuitive employee stipend software, you can easily automate and streamline the entire process, reducing administrative burden and ensuring a seamless, hassle-free experience for both you and your team. Plus, Compt helps you stay compliant with tax regulations, ensuring that stipend payments are handled correctly and efficiently — giving you peace of mind and protecting your business from potential tax liabilities.

Four steps to setting up a wellness stipend:

1. Name your stipend and add a description.

When naming your stipend you can keep it simple, or get creative. Whether “Wellness Stipend,” “Feel Good Fund,” or something else, it’s totally up to you.

And you don’t have to do it alone. Our top-rated Customer Success team has helped hundreds of HR professionals not only name their stipends, but design them — all the way from the big-picture goals that align with your business and employee needs and budgets to the nitty gritty of naming and program descriptions.

2. Specify stipend amount per employee and timeframe.

Do you want to offer this monthly, or do you prefer to offer it on a quarterly, semiannual, or annual basis?

Quarterly funding has become the default operating cadence for all-inclusive LSAs. According to Compt’s annual benchmarking, 78% of LSAs were funded quarterly, reflecting how employers balance employee planning with predictable budget control.

3. Identify which categories the stipend should cover.

Your health and wellness stipend is designed to support your employees’ well-being, so you’ll definitely want to select the Wellness category. However, many companies expand their offerings by adding categories like Food, Family, and Treat Yourself, allowing employees to define what “health” means to them at different stages of life. These additional categories don’t increase your cost and they provide more options for employees to support their holistic well-being.

If you want to make your monetary investment go even further, consider providing a Lifestyle Spending Account (LSA). With an LSA, you can include health and wellness alongside several other categories, giving employees the flexibility to choose benefits that best match their current needs — whether that’s health, caregiving, pets, student loan repayment, and more.

By offering a wider variety of spending categories, an LSA empowers employees to direct funds toward the areas that are most important to them, providing the maximum level of personalization and a holistic approach to lifestyle benefits and perks.

Below we cover the other popular stipend categories we see at Compt. Any of those can be combined with a health and wellness stipend to become a Lifestyle Spending Account (LSA).

4. Lastly, invite your employees to spend their wellness funds.

Once they receive an invite and activate their account, they can begin spending based on your program’s start date.

Post the requisite information on your company’s internal wiki or other internal communication channel, and send an email to notify them. A robust internal communications plan will help your program realize success from the very beginning.

If you’d like additional best practices and guidance on designing a wellness stipend, we’ve got you covered.

Other types of stipends Compt offers

Health and wellness stipends aren’t the only type of stipend companies are offering these days. In fact, stipends are quickly becoming one of the most sought-after perks, showing up on nearly every “top perks” list.

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
• Commuter stipend
• Equipment stipend
• Family stipends
• 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
• Anniversary bonus
• Lifestyle Spending Account: Companies combine one or more of the stipends above together to create a general perk stipend that gives employees even more flexibility to choose what matters to them.

Offer wellness, the Compt way

See why Compt customers get 3x more employee participation rates than traditional point-solution wellness vendors.

Schedule a demo

Next up: Schedule a demo with Compt

Burnout and costs are both climbing, and you’re being told to cut wellness programs or justify every dollar spent.

Not long ago, your wellness perks worked well. Employees appreciated them. Leadership supported them. But the world has shifted; expectations changed, business outlooks evolved, and now those once-loved perks are going unused and are on the budget chopping block. You’re left trying to make outdated programs prove modern impact.

A wellness stipend changes that. Your team chooses what supports their health — whether that’s gym reimbursements, running shoes, or wearable tech. You get full visibility into what’s working, can prove ROI with real-time reporting, and finally offer a benefit employees actually use.

Replace or consolidate multiple wellness vendors into one stipend that drives 90%+ engagement and makes every dollar count.

Schedule your Compt demo.

FAQ: Health and wellness stipends

Please 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.

The post The Ultimate Guide to Health and Wellness Stipends appeared first on COMPT.

It’s something businesses can’t ignore: Noncompliance can lead to hefty fines, back taxes, interests, collections, and even jail time.

What is an Employee Reimbursement?

An employee reimbursement is an additional payment you make to your employees when they pay for an expense out of pocket. While the most obvious example are business expenses (e.g. hotel, transportation, per diem meal allowance, etc.), many businesses are now finding new ways to reimburse their employees for certain personal expenses as part of a competitive employee benefits package. These include:

• Gym memberships
• Phone bills
• Fertility benefits
• Health and wellness co-pays
• And so much more…

At Compt, this is what we’re excited to offer our clients through our lifestyle benefits platform that helps you accurately (and compliantly!) reimburse employees for taxable and non-taxable benefits. At last count, our users were reimbursed from over 70,000 vendors in 2023. So yes, the options are pretty endless.

Our software is designed to categorize and properly report benefits according to IRS guidelines to help businesses maintain compliance.

As I’ve noted, the consequences of noncompliance shouldn’t be taken lightly. It’s incredibly important to keep track of employee reimbursements and report them accurately on your taxes.

Are Employee Reimbursements Taxable?

The answer is… Sometimes.

Paying any sort of wage or income to your employee will always come with withholding or contributing taxes.

But for reimbursements, it’s a little different. While companies can put in place reimbursement policies dependant on the type of expense, many companies cover employees’ expenses through either an accountable plan or a non-accountable plan to fulfill IRS reporting requirements.

(You can find out more about your tax obligations as an employer in IRS Publication 15.)

In this guide, we’ll give you the rundown on how to report employee expenses, what is and isn’t taxable, and how to handle paperwork for employee reimbursements.

But first, a quick chart to help with this breakdown:

Accountable Plan vs. Non-Accountable Plan

Before we dive in, it’s important to note that for expenses to qualify for any of the non-taxable categories below, they must be reimbursed under an Accountable plan. Below, we’ve shared the IRS guidelines for an Accountable plan. If these requirements are not met, they are considered reimbursed under a non-accountable plan and therefore taxable income to the employee.

Accountable reimbursement plans

An accountable reimbursement plan is the most common option for employers. Accountable plans aren’t taxable, but for this to happen, according to the IRS, they have to meet the following guidelines:

• There is a clear correlation between the expenditure and the business activity in question. Employees must incur expenses while fulfilling their roles/duties within the company. The incurred costs should be directly related to their job functions.
• The employee substantiates these expenses with sufficient details. Employees need to make sure they include appropriate details, such as the date, location, amount spent, and specific business purpose of the expense, all meant to further verify the job-related expense.
• Reimbursements take place in a ‘reasonable amount of time.’ The IRS states the employee needs to document the expense within a 60-day timeframe following the expense. Employers have to reimburse employees within 30 days of receiving purchase documentation.
• Excess reimbursements are returned to the company within 120 days. For example, if an employee receives $100 for office provisions but spends only $80, the remaining $20 should be handed back to the company before the 120-day mark.

If expenses aren’t handled properly in this way, then the employer has to report reimbursable expenses in your employee’s W-2, which, as you can imagine, is an administrative nightmare.

FLSA and employee expense reimbursement

There are reimbursement exceptions that are worth noting. First of all, the Fair Labor Standards Act (FLSA) doesn’t require you to reimburse business expenses, as long as the employee’s wages or salary remain above the minimum wage threshold.

While the FLSA is a federal labor law, there are several state laws that do obligate employers to cover business-related costs an employee incurs. So you’ll have to ensure compliance at the state and federal level when managing accountable plan reimbursements.

The following states also require employers to compensate employees for expenses stemming from remote working conditions:

• California
• D.C.
• Illinois
• Iowa
• Massachusetts
• Montana
• New Hampshire
• New York
• North Dakota
• Pennsylvania
• South Dakota
• *Washington (Seattle only)

The exact law varies from state to state. Expenses under these laws include charges for internet connectivity, phone bills, and other remote work costs. While this maze can be difficult to navigate, that’s exactly why Compt has been built to be tax compliant, so these nuances can be handled within the Compt software.

What Employee Reimbursements Qualify as Business-Related Expenses?

Often, you’ll know exactly what your business-related expenses are — you can’t do business without them! It could be things like your office supplies, tools or machines needed to do the job, etc.

Generally speaking, business-related expenses are anything that employees need to do their jobs safely and effectively. And these business-related expenses have different rules when it comes to reimbursement.

Supplies

Common business-related expenses include:

• Office supplies
• Printing costs
• Tools and machines needed for the job
• Software licenses and subscriptions
• Safety equipment

As long as they’re reimbursed according to an accountable plan, business tools and supplies don’t count as taxable income.

Business travel expenses

Work-related travel expenses are reimbursable by the employer without impact to the employee’s taxable income, as long as they meet the criteria in IRS Publication 463.

Common expenses in this category include:

• Transportation (flights, car rentals, Uber/Lyft rides)
• Hotel and Airbnb stays
• Meals and incidentals (e.g., tips)
• Business entertainment costs

Many employers pay employees back for personal vehicle use for business travel. If you do, the IRS requires you to track mileage using the standard rate (67¢/mile in 2024).

Commuter expenses can also be provided as a pre-tax benefit. Employers can withhold up to the IRS limit ( $315 per month for 2024) for transportation expenses to/from work. Parking, transit passes, and commuter highway vehicle transportation are a few examples.

Company Vehicles

Companies can provide a company car, or they can provide an allowance to pay for a portion of your personal car’s use. These rules can get very cumbersome and unique to each situation. But in general, the portion of the vehicle used for business is reimbursable as nontaxable, and personal use of the vehicle would either not be reimbursed or considered a taxable fringe benefit to be added to the employees’ payroll.

IRS Publication 463 provides more detail into this topic.

What About Per Diem Reimbursements?

If the nature of your business requires some of your employees to travel regularly, it’s sometimes a better idea to give employees allowances at a per diem rate. This is a fixed amount of money you give to employees to cover their travel expenses.

Per diem payments can be an attractive alternative to lump-sum reimbursements since you don’t have to track all the individual expenses. The reimbursement has to cover multiple days and be based on the IRS’ per diem rate in your region. Anything over that rate is subject to payroll taxes.

Meals and entertainment costs

Meals that are reimbursed or provided by the employer must meet certain criteria in order to not be considered a taxable fringe benefit, such as the following:

• De Minimis meals are occasional meals provided to the employee of little value (taking into account how frequent they are provided) that accounting for it would be unreasonable. Coffee, doughnuts, occasional meals to enable employees to work overtime, or occasional parties or picnics for employees and their guests are some examples.
• Meals provided on the business premises and furnished for the Employer’s convenience.
• Meals directly related to business meetings.

The value of the meals that fit this criteria may be provided or reimbursed tax-free to the employee. However, there are additional stipulations on whether these amounts are subject to a 50% limit on the deduction for employers.

Professional development

When an employer pays for an employee’s professional development, the expenses are usually reimbursable if the training is required as part of maintaining your current salary, status, or job, or is needed to maintain or improve the skills in your current position.

Common expenses in this category are:

• Training and upskilling
• Courses
• Conferences
• Seminars
• Trade shows
• Professional fees (for memberships/consultations)

If these require the employee to travel, such as attending conferences or trade shows, the travel-related expenses are subject to the qualifications outlined in IRS Publication 463.These expenses cannot be part of a program of study that qualifies you for a new trade or business.

Education expenses that are part of a program that qualify you for a new trade or business can be reimbursed tax-free up to $5,250 through January 1, 2026, which applies to student loan reimbursements as well.

(Additional information regarding what qualifies under this program can be found here.)

Under Internal Revenue Code Section 127, employers are allowed to offer up to $5,250 per year in educational assistance to each employee without subjecting the employee to any tax implications.

Thanks to the 2020 CARES Act and Consolidated Appropriations Act, this allowance includes student loan repayments and tuition reimbursement. The $5,250 is a combined total for both, so employers need to keep track of how much they’re dishing out in each category.

Remote work costs

Remember when we talked about business expenses being an expense occurring as a result of, well, doing your job? This can include certain remote work expenses.

Remote work expense examples include:

• Internet connection and data costs
• Cell phone bills/cell phone stipends
• Home office supplies

Employers may reimburse employees for the business use portion of otherwise personal expenses and then exclude this amount from the employee’s taxable income. Of note, employers need to make these expenses are documented properly, and assess expenses in a fair and logical way.

If you do business or hire employees in Seattle, D.C., or one of the 11 states listed under the FSLA section above, double-check your local regulations to ensure compliant reimbursements.

Home office equipment that is required to set up your working environment at home can be considered a business expense and therefore is a non-taxable reimbursement for the employee.

However, be sure that the equipment stipends designate these items as company property for use in the business only.

What Doesn’t Qualify as a Business Expense?

Certain expenses or benefits that don’t fall into the above categories are subject to payroll taxes and need to be reported on the employee’s W-2.

Stipend reimbursements

Perk stipends are the ideal way to show your employees much-deserved appreciation and incentivize loyalty. Stipend reimbursements include:

• Gym reimbursement
• Health and wellness stipends
• Charitable giving stipends

These are fixed amounts you pay employees that help to offset some of the overall cost of the item/service. These can be given as monthly/quarterly/annual allowances through payroll or as one-off payments. If they are not specifically carved out under IRS Pub 15b , they are considered taxable fringe benefits and should be included in payroll as such. .

Gifts and bonuses

Gifts (including gift cards), bonus payments, and spot bonuses made to employees are also subject to payroll taxes. Typically, the event surrounding the gift or bonus doesn’t matter, whether that’s for the holidays, special occasions, or as a simple act of employee recognition.

There are some exceptions. De minimis gifts, any property or service you provide to an employee that has so little value (taking into account how frequently you provide similar benefits to your employees) that accounting for it would be unreasonable or administratively impracticable, can be excluded from income.

However, note that cash and cash equivalent fringe benefits (for example, gift certificates, gift cards, and the use of a charge card or credit card), no matter how little, are never excludable as a de minimis benefit.

In addition, services awards can be excluded from income if they follow the specific criteria below.

• the value of up to $400
• The gift must be “tangible personal property,” which excludes cash or cash equivalents, securities, vacations, lodging, meals, tickets to theatres or sporting events.
• The award must be presented as part of a “meaningful presentation.” The presentation does not have to be elaborate, but emphasis must be put on the employee’s achievement.
• The award must be presented under conditions that do not create “disguised compensation.”
• Length-of-service awards must not be presented to employees for less than five years of service.
• The employee may not receive another length-of-service award (other than one of very small value) during the same year or have received an award in any of the prior four years.

Employee Medical Expenses and Employee Reimbursements

Medical expenses are an interesting case. Most employers offer an employer-sponsored health insurance plan, but medical expense reimbursement plans (MERPs) are another way to go about this.

Health reimbursement arrangements (HRAs) are the most common type of MERP.

There are a few types of HRAs, each with their own exceptions:

• Qualified small employer HRA (QSEHRA) — a tax-free reimbursement program that allows small employers (fewer than 50 employees) to provide monthly or annual allowances for eligible employees to cover insurance premiums and IRS-approved expenses, without offering a group health plan.
• Individual Coverage HRA (ICHRA) — a more flexible option for employers, they can be used by any size company with no contribution limits. Employees can be reimbursed tax-free for individual health insurance coverage based on their job classification.
• Group Coverage HRAs (GCHRAs) — also known as integrated HRAs, these allow employers to reimburse employees on a group health insurance plan for expenses not fully covered by their plan.

It’s important to distinguish health stipends from MERPs. Health stipends are taxable because employees can spend them on whatever they want, whereas MERPs only allow employees to spend the money on eligible medical expenses outlined by the IRS.

Losing sleep over tax compliance? Use Compt for your employee reimbursements instead.

Head spinning yet? We don’t doubt it. Here’s the thing: It’s a lot easier to use stipend and reimbursement software than it is to handle employee reimbursements manually. Which is why we do it for you.

Compt’s platform makes it easy to handle all this tax compliance stuff, so there are no more spreadsheets or manual tracking offline. It also makes tracking individual receipts  and generating comprehensive reports easy.

And, since our platform works with payroll systems like ADP and Rippling, you don’t have to worry about manually updating payroll records, either.

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.

The post Employee Reimbursement Guide: What’s Taxable? appeared first on COMPT.

According to Compt’s 2026 Annual Lifestyle Benefits Benchmark Report, flexible lifestyle benefits programs are becoming a central part of modern incentive strategies. Among Compt customers, 64% now offer an all-inclusive Lifestyle Spending Account (LSA) and participation across flexible benefits programs reaches 93% of employees.

In this guide, we’ll break down how employee incentive programs work today, the different types companies use, and how to design programs that motivate employees while staying scalable and cost-effective.

What are employee incentive programs?

“An incentive is a bullet, a key: an often tiny object with astonishing power to change a situation.” — Steve Lewitt

Steve is right: an employee incentive program encourages employees to achieve their ambitious goals by strategically driving their efficiency with various rewards and growth opportunities. When crafted for the long run, this undoubtedly benefits both your employees and the organization.

Consider this: new hires in your company need a training program to level up their skills, or your hard-working employees expect a satisfactory hike in their salaries. If your employees receive this support timely without begging, it will drive their engagement with 17% more productivity.

In turn, they’ll serve you more than you think, ultimately helping you increase your ROI (return on investment).

Types of employee incentive programs (monetary and nonmonetary)

There are many simple though sure-shot ways to craft an incentive program and thank your employees with flexible benefits that can be varied and customized according to various industries.

Monetary incentives

Monetary incentives are financial in nature that you can provide to promptly appreciate your employees with cash or its equivalents, which are:

• Salary increment
• Hike on bonus
• Commission-based targets
• Referral bonuses
• Recognition and rewards with cash or gift cards
• Profit sharing
• Stock options
• Employee reimbursements
• Extra allowances

Nonmonetary incentives

Nonmonetary incentives are more about noncash perks to drive employee engagement and boost their morale, which you can do with:

• Flexible work arrangements
• Experiential rewards
• Additional time off
• Tangible rewards and gifts
• E-thanks or nonmonetary recognition
• Courses and training related to professional development
• Multiple fringe benefits

Modern employee incentive structures in 2026

While traditional incentives like bonuses and commissions remain important, many companies are expanding their programs to include flexible and software-enabled incentives.

Common structures include:

• Lifestyle stipends and LSAs: Employers provide a flexible allowance employees can spend on wellness, professional development, family support, or everyday needs.
• Recognition and spot bonus programs: Managers and peers can award small bonuses or recognition points in real time to reinforce great work.
• Learning and career incentives: Companies reimburse courses, certifications, and career development programs to motivate long-term growth. In 2026, more organizations are using professional development stipends to incentivize AI use and experimentation.
• Performance-based rewards: Sales commissions, profit sharing, and milestone bonuses remain core incentives tied directly to company outcomes.

This combination allows companies to support employee motivation across both short-term achievements and long-term engagement.

Modern incentives increasingly emphasize flexibility rather than one-size-fits-all perks. According to Compt’s 2026 Annual Lifestyle Benefits Benchmark Report, employees spend benefits across 64,000+ vendors globally, and 70% of spending goes to local or niche vendors, highlighting the value of flexible incentive structures that adapt to individual needs.

How to choose the right incentive programs for your employees

Choice, Chance, and Change!

Popular examples of employee incentive programs

“Show me the incentive, and I will show you the outcome.” — Charlie Munger

If you engage your employees with incentive deals to reinforce their profitability, your employees can reiterate Charlie’s words.

Google’s Peer Bonus Program

The first of its kind, Google’s peer bonus program allows its employees to nominate any colleague for spot bonuses with specific rules:

• They can’t nominate their manager,
• managers can’t nominate their subordinates, and
• reciprocity or repeated nominations within six months are not allowed.

Nominators provide a brief description of the nominee’s achievements, and managers review each nomination before accepting or rejecting it. If no action is taken within 3-5 days, the system automatically approves the bonuses, but at the same time, any nonsensical nominations are also rejected.

While work-related nominations are ideal, recognition for trivial or nonsensical reasons is not considered for peer-to-peer bonuses, leaving marks for an unbiased acknowledgment.

Zappos’ Wellness Programs

Another exceptional example of an employee incentive program is set by Zappos, which strongly redefines the company culture.

To free its employees from work and give them enough time to relax, Zappos offers multiple benefits. It provides an on-campus fitness center so Zapponians can effectively manage their weight and maintain a healthy lifestyle, remembering to hydrate post-workout. Additionally, they have designed a nap room, so Zapponians can take a quick nap and refresh to return to work.

This holistic approach shows how Zappos prioritizes its employees’ overall well-being, enhancing their productivity and job satisfaction.

Salesforce’s Volunteer Time Off (VTO)

Salesforce is an ideal corporate brand, showcasing the principle of an effective employee recognition program through its commitment to Volunteer Time Off (VTO).

Their employees receive an above-average VTO benefit of 56 hours, or 7 business days, each year for causes they are passionate about. They can utilize this time to pursue higher education, participate in climate justice initiatives, be involved in workplace development, or choose any other suitable cause.

This employee incentive program drives the value of compassion and fosters healthy relationships within the workforce community.

Amazon’s Career Choice Program

Last but not least, Amazon’s Career Choice Program is one of the well-crafted incentive programs attracting 150,000 Amazon employees to participate. As they understand that career choice isn’t meant to be always holding a high school diploma or other higher education certificates, they step into this program to upgrade their employees’ skills and strategize higher retention.

Amazon provides on-campus and virtual offerings that include:

• Pre-paid tuition for several college degrees and certifications
• Various industrial certifications for in-demand roles
• Foundational linguistic courses
• Career coaching and advising programs with their career choice partner, Mr. Kaplan

It simply reflects how Amazon cares for its employees and provides support to keep them engaged and push them to reach goals at any stage of their journey.

Bring better incentives to your people with Compt.

Employee incentive programs are most effective when they combine recognition, financial rewards, and flexibility in ways that align with both employee motivation and company goals.

As organizations rethink their total rewards strategies in 2026, incentives are increasingly integrated with broader benefits programs, recognition platforms, and flexible stipends. When designed thoughtfully, these programs can strengthen engagement, improve retention, and help companies build a workplace where employees feel valued and motivated to perform at their best.

Now that you understand their benefits and how to craft them, you may need a guide to help you navigate. With Compt, you can do it well, as it helps you create high-value, flexible, and personalized benefits that employees are seeking.

Request a demo with Compt to see for yourself.

Written by guest author Joy D’Cruz, a content marketing specialist currently working with SaSHunt.

FAQs: Employee incentive programs

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

The post The Definitive 2026 Guide to Employee Incentive Programs appeared first on COMPT.

We’ll dive into all of their advantages later in this guide, but to put it simply — it’s because …

… traditional benefits alone no longer meet employees’ evolving needs.

What used to be standout lifestyle benefits (also sometimes called perks) — things like unlimited coffee, free food, and the flexibility to work hybrid or remotely — have become baseline expectations. Prospective employees of your organization won’t view them as differentiators and aren’t going to be very impressed if that’s all you’ve got.

When you offer the best employee benefits, your company can unlock a truly personalized experience for your employees’ diverse needs so they feel supported and equipped to thrive at your company, whether your team is fully remote, hybrid, or back in the office.

On the Compt platform, lifestyle benefits have become a foundational part of compensation design, with 65% of Compt customers now offering all-inclusive LSAs and average funding rising to $1,029 per employee.

What are lifestyle benefits?

First, a definition:

Lifestyle benefits, sometimes referred to as employee perks, are nonsalary benefits that help employees improve their overall well-being and lifestyle. They extend support beyond standard medical, dental, and vision benefits.

Modern companies turn to lifestyle benefits to broaden employee access to goods and services that improve all areas of their lives, including mental and physical health and financial and household needs

The categories employee lifestyle benefits can cover include:

• Health and wellness
• Professional development
• Childcare
• Elder care
• Pet care
• Fertility benefits and menopause support
• Productivity tools and apps
• Food and groceries
• Student loan repayment assistance
• Financial wellness benefits

In practice, Compt lifestyle benefits are delivered through lifestyle stipends — flexible reimbursements that let employees choose the vendors and services that fit their lives.

What are the advantages of lifestyle benefits?

Lifestyle benefits are now a core part of modern compensation strategies. Here’s why more companies are embracing them, with reasons that represent the advantages of offering a lifestyle benefits program:

1. You gain a competitive edge among current and future talent.

Most companies already offer fair compensation and standard benefits, like PTO and medical, dental, and vision benefits. So, how can you stand out?

Offering Lifestyle Spending Accounts is a powerful way for employers to differentiate themselves in a crowded hiring market while staying true to their organizational values and building culture along the way.

2. You directly impact employee engagement and retention, two persistent people challenges.

Even companies with very generous overall benefits packages can suffer from high attrition and low employee engagement and productivity. Gallup continues to report high levels of stress and disengagement globally, making personalization in your benefits package utterly critical.

Offering employee lifestyle benefits that are customized to your people’s unique needs is hugely beneficial for companies wanting to increase employee engagement and retention over the long term as workplace conditions evolve.

(Compt customers routinely see 90%+ participation with lifestyle benefits. We’d be happy to show you how.)

3. You create and sustain an inclusive company culture.

Companies are expected to build inclusive workplaces and to show that commitment through real, equitable support.

Lifestyle benefits can be designed in a way that addresses all of the needs of your diverse workforce, whether that means supporting an employee who’s a 22-year-old recent graduate who lives in the city with a cat or a 55-year-old executive with three kids and a home in the suburbs. Flexible perk stipends are ideal for that type of personalization and inclusivity.

4. You balance impact with cost efficiency, because lifestyle benefits are inexpensive compared to salary.

There are many reasons you might not want or be able to offer employees a pay increase; budgets for raises have remained relatively flat. When increasing your people’s compensation isn’t an option, offering meaningful lifestyle benefits can be powerfully effective in making them feel supported — sometimes even more than a simple pay bump.

It also keeps costs low for you, especially if you use a lifestyle benefits platform like Compt, which uses a reimbursement-based workflow to automate tax compliance and reduce administrative time and effort.

On the Compt platform, the average annual stipend funding is $1,029 per employee — a predictable, cost-efficient investment.

This trend toward expanded and personalized employee lifestyle perks and benefits — and away from cookie-cutter basic benefits packages — has been a long time coming. Employees have been asking for more flexibility and choice in their total compensation for years.

According to Randstad’s Workmonitor 2025 research, work-life balance now outranks pay as the top job factor for 85% of employees worldwide — and for the first time, it also surpasses pay as a motivator for 79% of respondents. This shift underscores why companies are expanding lifestyle benefits; the support employees value most today goes far beyond salary.

When was the last time you conducted an employee benefits survey to see what your people want? Now is the perfect time to re-evaluate and revamp your outdated perks programs to better support your employees’ lifestyle needs. If you’re looking for inspiration, here’s a helpful resource detailing employee engagement ideas for remote workers.

Comparing employee perks platform vendors? Check out our guide for everything you need to know.

Examples of employee lifestyle benefits offered by top companies

The list of companies offering flexible and inclusive lifestyle benefits is ever-growing, but here are a handful that stand out as great examples:

Google

Google has offered several lifestyle benefits over the years. During the shift to remote work in 2020, the company provided a one-time $1,000 work-from-home stipend to help employees set up their home offices. Google has also offered programs like “baby bonding bucks,” a $500 stipend for new parents to help cover essentials during the early weeks of parenthood. These offerings highlight Google’s ongoing investment in employee well-being and flexibility across locations and life stages.

Starbucks

Starbucks offers lifestyle benefits focused on education and long-term growth. Eligible partners can receive up to $1,000 per calendar year in tuition reimbursement for courses at accredited institutions. Through the Starbucks College Achievement Plan, qualifying employees pursuing an online degree from Arizona State University receive 100% tuition coverage.

Deloitte

Deloitte provides employees with a flexible annual well-being subsidy of up to $1,000 that can be used for a wide range of wellness-related expenses, from fitness subscriptions to more unconventional items like Lego sets or ergonomic gear. This program emphasizes personalization of well-being, allowing employees to choose what matters most for them.

Eventbrite

Eventbrite supports employee health through a $60-per-month wellness stipend. In addition, they offer remote-work stipends, wellness reimbursements, and broader support for home-office productivity and caregiving.

LinkedIn

LinkedIn — which knows a thing or two about the workplace — offers one of the most flexible and generous lifestyle benefits programs in the market. Employees receive a $2,000 annual wellbeing allowance that can be used on fitness, hobbies, home services, childcare support, travel, or other lifestyle needs, reflecting LinkedIn’s belief that well-being is deeply personal. LinkedIn has also used stipends and reimbursements to help employees create comfortable and productive home-office setups.

Carrot Fertility

Carrot uses Compt to support employees around the world with flexible lifestyle benefits that adapt to different life stages and household needs. With Compt’s vendor-agnostic model, Carrot employees can spend their stipends on what matters most to them, including family and wellness expenses, productivity tools, and everyday essentials.

As Carrot’s CHRO puts it:

“It’s been a really easy and fun way to offer perks, which has added to the experience our employees are having. It’s a low lift on the HR side, which goes a long way.”

There are many more examples of companies doing this successfully. If you want to hear what our customers are doing, click here to talk with a Compt lifestyle benefits specialist.

Note: Benefits can change over time, so always check each company’s careers page for the latest details.

Ways to structure lifestyle benefits (and what most companies do)

There are several ways you can offer lifestyle benefits. You actually might already be offering some sort of lifestyle benefit that can easily be turned into a more thought-out lifestyle benefits program. Examples include a professional development stipend, a gym membership reimbursement, or meal reimbursements, all of which can be expanded into a more intentional lifestyle benefits program.

Regardless of what you currently offer, getting started is straightforward. Here are two main ways to offer lifestyle benefits:

1. Offer individual lifestyle benefits focused on one area at a time.

Like some of the examples listed above (e.g., Starbucks’ tuition reimbursement program), many companies start with a single category and build from there. This approach works well when you want to meet a specific need without introducing multiple new processes at once.

Category-specific stipends are some of the most common programs among Compt customers. These stipends are easy to launch, flexible, and simple to manage.

This snapshot shows what one customer’s health and wellness lifestyle stipend benefits look like with Compt. Click here to talk with a Compt lifestyle benefits specialist to learn more.

2. Offer all-encompassing stipends to support a diverse set of lifestyle benefits.

If you want to cover multiple lifestyle needs without adding administrative overhead, an all-inclusive stipend — often called a Lifestyle Spending Account (LSA) — can consolidate everything into one flexible benefit.

This structure allows you to support a diverse set of needs, situations, and preferences at scale. As a people operations professional, you know firsthand that what someone needs today might be different next month (and will likely be different next year). An all-inclusive approach ensures your lifestyle benefits evolve alongside your people.

Among Compt customers, most companies that offer lifestyle benefits through our stipend software select one or more of the following broad-based categories for employees to spend in:

• Health and wellness
• Cell phone
• Learning and development
• Family
• Food
• Travel
• Pets
• Productivity
• Tech and equipment
• Student loan repayment
• Charitable giving
• Internet stipend
• Swag and branded merchandise

And this isn’t representative of all our 28 categories! For example, it doesn’t include stipends like a birthday or anniversary bonus. Taking a flexible, vendor-agnostic approach helps avoid the headache of keeping track of multiple vendors and instead gives your employees autonomy of choice.

Ready to see for yourself? Request a demo of Compt today.

FAQs: Lifestyle benefits

Editor’s note: Originally published in 2021, this post has been recently updated for clarity and relevance for our readers.

The post The Ultimate Guide to Employee Lifestyle Benefits appeared first on COMPT.