Just look below at what a few CEOs are mandating:

• Shopify: CEO Tobi Lütke called effective AI use a “baseline expectation” for all employees. Teams must even prove AI can’t fulfill a role before hiring new people.
• Uber: CEO Dara Khosrowshahi announced that within a year, AI skills will be mandatory.
• Duolingo: Expects employees to use AI proficiency as part of evaluation and hiring. Their “AI‑first strategy” now embeds AI-driven tasks and performance metrics into the workforce.
• Zapier: Now screens for AI-fluency during hiring.

And they’re not the only ones.

But while leadership raises the bar, employees are feeling shaky. In May, employee confidence hit its lowest point, with only 44.1% feeling positive about their six-month outlook. The gap between leadership expectations and employee ability is growing.

So while some technical teams sprint ahead on their adoption of AI, the real future of work won’t be won by tools alone — it will be won by people.

And in 2025, helping employees adopt and use AI isn’t a nice-to-have — it’s essential for your business. As Andy Biladeau, SHRM’S Chief Transformation Officer said:

“HR does not exist to drive HR. HR exists to drive business outcomes.”

That’s why we created this guide on everything you need to know about the most strategic investment HR can make today: AI stipends.

What is an AI stipend?

Definition:

An AI stipend is an employer-funded benefit that gives employees a fixed amount to spend on AI tools, apps, training, or services that enhance their productivity and professional growth.

It can cover:

• Subscriptions like ChatGPT Pro, Perplexity, Enari, Coefficient, Claude Code
• Prompt libraries and research
• Online courses and certifications in AI, or prompt engineering
• AI-powered note-taking, design, and writing tools like Fathom, Granola, Jasper, Copy.AI

Also known as AI tools stipends, innovation funds, or upskilling allowances, these are typically distributed monthly, quarterly, or annually, and depending on how they are designed, they can be a nontaxable or taxable benefit.

Example:
Buffer provides a $250/year AI Tools Stipend. They describe it this way:

“We noticed inconsistencies in AI tool reimbursements. The stipend lets us support innovation in a structured, fair way.”

Why AI stipends matter

According to IBM’s 2025 CEO Study, 54% of CEOs say their organizations are now hiring for AI-related roles that didn’t exist a year ago. This means that HR will not only need to fill new AI roles fast, but that upskilling your existing workforce has become more critical than ever. 

That was highlighted by a recent HRD article, which had this to say: 

HR teams are adopting AI at speed—but they’re hitting a wall. According to Capterra’s 2025 survey of over 3,000 HR leaders, 43% say their teams lack the skills to use AI effectively…”

Every day it becomes more and more clear that AI literacy gaps are an existential risk for businesses.

AI stipends address the rapid pace of change and future-proof your company (and employees’ careers) by giving employees structured, self-directed ways to experiment, learn, and grow with AI, while maintaining oversight and minimizing risk.

Benefits for employees

Personalized learning & tools

Different teams and roles need different tools. A marketer may prefer Jasper; an analyst may lean into ChatGPT Pro. AI stipends empower tailored skill development.

Boosted confidence

With access to AI resources and training, employees feel supported (instead of left behind).

Reduced anxiety

In times of uncertainty, offering upskilling pathways shows a commitment to employee growth and career resilience. 

Benefits for employers

Avoiding tool chaos

Stipends centralize AI spend, while still giving employees freedom to experiment.

Better ROI on AI initiatives

ROI is higher when employees choose what’s useful and relevant, versus a traditional approach of generic enterprise licenses.

The company example mentioned above, Buffer, had this to say about how they’re seeing value in their AI Tool Stipend already:

We already have some early success stories:

• Customer Advocacy Team: Exploring ways to enhance customer interactions with AI support.
• Content Team: Experimenting with AI for research and ideation while maintaining our unique voice. The stipend is already having an impact here as our content writer, Tami, wrote an article detailing an experiment with five AI chatbots and how they might fit into creators’ workflows.
• Engineering Team: Boosting productivity through AI-assisted coding.

Talent magnet

The 2024 WorkHuman IQ Survey found that those who are using and familiar with AI are 2x more likely to recommend their company to others.

Investing in future-oriented development is a big win for attracting and retaining forward-thinking professionals, which has again become a top priority of organizations. 

Strengthened upskilling pathways

CEOs expect returns from AI with 61% anticipating firmwide benefits from AI agents, but HR needs scalable methods. AI stipends offer one such path.

Faster and better innovation in your business 

One of the main concerns on every CEO’s mind right now is, “What are we doing for AI?” 

If you’re a software business, it’s likely your CEO is pushing — if not demanding — that the product team integrate AI into your software, and fast. 

At the same time, they’re also concerned about competitors who are ahead of the curve in adopting AI. 

And their concerns are backed by research. A recent Harvard study revealed that “individuals and teams using AI worked 12-16% faster than the ones without AI and produced longer and more detailed solutions.” 

This means that competitors embracing AI will be able to deliver more, faster, and better. For CEOs (yours included), there’s no greater win than launching a program that encourages and motivates the team to learn, experiment, and use AI to enhance their work and drive business results. 

As Amy Spurling, CEO of Compt, put it: “If AI is your biggest investment this year, your second should be helping your team adapt to it. AI is already reshaping work. Your benefits better help your people keep up or they’ll find an employer who does.“

This is why AI stipends are the answer.

By addressing the CEO’s top concern — AI adoption — HR can solve a critical business challenge while demonstrating vision, innovation, and the ability to execute on high-impact initiatives, positioning yourself as a key player in driving the company’s future success. Talk about being strategic!

What employees can spend an AI stipend on

The most common use case we’ve seen from our customers has been their AI stipends being spent on tools. However, depending on how you design your program, it can go beyond tools, and cover prompt libraries, AI courses, or hiring AI experts to help managers automate workflows. 

Below is a short list of what we’ve seen customers spend their AI stipends on:

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

Ready to build your own program? Discover 3 ways real companies are using AI stipends in 2026.

Real quotes from employees using AI stipends

Below are real quotes and stories from Compt users highlighting the powerful impact their company’s AI stipend has had on their lives.

• “I used my AI stipend to upgrade to ChatGPT Pro. It’s been a game-changer for my productivity.”
• “I love that my company not only encourages me, but also foots the bill, for my experimentation and evolution in marketing with this AI tools stipend!”
• “It made me feel supported to try new tools without asking for approval every time.”

Are AI stipends taxable?

There’s no specific IRS ruling that directly addresses AI stipends yet. However, depending on how your program is designed, it may fall under existing IRS rules, particularly Working Condition Fringe Benefits (WCFBs).

According to the IRS, a WCFB exclusion applies when:

“The property or services provided enable an employee to perform their job, and would be deductible as a business expense if the employee had paid for them directly.”

This means if the AI tools or training are used solely for business purposes—not for personal development or preparing for a different role—there’s a possibility the stipend may be excluded from taxable income.

To support that position, some employers choose to apply internal guardrails, like:

• Requiring sign-up with a work email address
• Documenting that tools are used for current job duties
• Reserving the right to revoke access or reassign licenses
• Making it clear that the tools are for business use and not personal ownership

That said, many companies take the more conservative route and treat AI stipends as taxable fringe benefits just like other lifestyle stipends. This simplifies administration, avoids audit risk, and ensures full transparency with Finance.

Feeling overwhelmed? We get it. The good news is, Compt helps you configure your AI stipend program to align with IRS guidelines and your internal policies. We’ll help you categorize, track, and report everything so Finance isn’t left sorting it out at year-end.

Please note: Compt supports accurate benefit categorization and payroll integration based on IRS guidelines. We do not provide tax advice. Please consult your own legal, tax, or accounting advisors to determine the right approach for your business.

Pair with other stipends

AI stipends pair well with other workstyle stipends, including:

• Learning & Development stipends
• Productivity stipends
• Broader Lifestyle Spending Accounts (LSAs)

How to set up an AI stipend with Compt

1. Name it: Choose something like “Innovation Fund” or “AI Learning Budget.” The most common name our customers are using today is “AI Tools.”
2. Set amount & cadence: Common ranges are $20–$50/month or $250–$500/year.
3. Define eligible categories: Within Compt, you can select the category: “Learning & Development,” “Productivity,” or both.
4. Launch & invite: Employees submit receipts, view reimbursement progress, and track their balance — all while HR retains oversight.

With Compt, everything from tax and payroll integration to usage analytics is automated.

Frequently Asked Questions (FAQs)

AI Stipends: because ‘figure it out’ isn’t a strategy.

AI is transforming every team in your company, and HR is expected to lead the change.

But most HR teams are stuck reacting to AI hype without a plan. Meanwhile, CEOs are hiring for new AI roles and expecting forward momentum — fast.

This is your chance to flip the script: move from reactive to strategic, and lead an initiative that actually positions HR as a driver of innovation.

Get and stay ahead of trends and schedule a demo of Compt today.

The post The Ultimate Guide to Getting Started With AI Stipends appeared first on COMPT.

First off, how are you defining a professional development account? 

A professional development account (also called a ‘professional development stipend’) is a designated employer-funded program that empowers employees to invest in their career growth and skill advancement through their choice of learning opportunities.

Professional development accounts are becoming increasingly vital as companies recognize their role in talent retention, with some reports stating that companies that invest in professional development see as much as 58% increase in employee retention compared to those that don’t. 

What’s more, professional development accounts encompass a wide range of tactics rather than offering a one-size-fits-all approach. Our latest annual Lifestyle Benefits Benchmark Report shows that offering employees ultimate choice is beneficial, with Compt customers choosing to spend their account dollars on more than 2,500 unique professional development vendors. 

Why Professional Development Matters in 2026 

Studies show that when it comes to attracting and retaining top talent, professional development opportunities matter. Creating an environment for high performance means just that: giving employees an opportunity to be high performers through whatever means they choose. 

Gallup recently published a report focused on the importance of employee development, stating that organizations that make a strategic investment in employee development report 11% greater profitability, with greater retention as well. 

Need more proof? The same study named ‘career growth opportunities’ as the No. 1 reason people gave for changing jobs. 

When employees are feeling valued and challenged, they will give more to their organization, fueling a high-performance culture. 

Professional development has no age limit

And this is across generations, too. LinkedIn reports that Gen Z is even more focused on career growth and learning than previous generations, watching 50% more hours per learner of educational content in 2020 compared to the year prior. 

When it comes to Millennials, Deloitte reports that only 36% believe their leadership skills were being developed effectively in their current roles. Gallup highlights this further in a study reporting that only 18% of millennials felt positively about their leadership skills. And let’s not forget about your Baby Boomers too. With the retirement age rising, more and more Boomers are looking to improve their overall technological skills. According to AARP research, 57% of workers over 50 are interested in gaining job skills if their employer requests it. 

Across the generations, it’s clear that upskilling and reskilling is the way forward for many employees, and employers can be equipped to help them.

According to a recent World Economic Forum Study, 58% of employees believe their job skills will significantly change in the next five years due to progressions in AI and big data. 

Companies can get ahead of this by offering professional development accounts and programs with a dedicated fund for employees to take whatever courses or learning opportunities they need, such as developing their leadership soft skills, AI coursework, or even a data analytics workshop to better understand explaining budgets and ROI to their C-suite. 

When it comes to professional development, no one’s path is the same. 

Key Benefits of Professional Development Accounts

A personalized professional development account has a wide range of benefits, and when designed correctly, these benefits extend past the employee to the teams that are deploying the accounts, too. Let’s break it down: 

Top benefits of professional development accounts for employees:

Autonomous learning paths

Rather than being locked into a course library that doesn’t truly help your employee advance, they can pick and choose professional development offerings that work for them. Anything from books, to courses, to networking groups, certifications, etc. The employer sets the guidelines and approval flows, and the employee is free to choose whatever works best for them. 

This helps deliver professional development tools for all levels and departments, rather than trying to find a one-size-fits-all approach, and lets your employees choose what they need. Whether they need to develop soft skills on communication styles or specific courses on upleveling their AI capabilities in their field, it’s all available to them. 

Better job performance

When employees learn more, they develop new skills that will help them in their day-to-day job. That’s the very definition of professional development. By giving greater access and visibility to professional development initiatives, employees will bring these skills and learnings to their everyday challenges, improving overall productivity and efficiency. 

Higher employee engagement

One of the top reasons employees leave a job is no career growth opportunities. Even if there’s no specific promotion available, employees are more likely to stay at a company that’s invested in their own professional development and growth, even laterally. This has a trickle-down effect on how fulfilled they feel at work and prevents them from feeling stagnant or bored. 

Top benefits of a professional development account for employers:

Improving retention and recruitment strategies

Offering professional development as a key benefit for potential employees can attract candidates that are looking to grow with a company, and can prove a company’s loyalty and investment to current employees.  

Increased productivity and efficiency

While individuals and teams will benefit from a more skilled coworker, this has an effect companywide as well. A company with employees who work efficiently and make fewer mistakes or can handle more complex tasks will benefit through greater output and productivity, directly affecting a company’s bottom line.

Succession planning

By spending time and energy developing the leaders of the future, companies can plan to internally promote, reducing recruitment costs for more senior-level positions that can be harder to fill externally. Professional development essentially helps build a pipeline for talent within the company, and keeps institutional knowledge within the company’s ‘four walls.’ 

And for both employers and employees, the tax benefits are advantageous. 

Certain educational and professional development benefits (such as tuition reimbursement) can lower overall taxable income for employees (so they don’t have to pay tax on it), and qualify as a deductible business expense for employers, making it a win-win! 

Examples of Professional Development Account Designs

Professional development is a core focus for companies of all sizes across all industries, particularly those that need to upskill their workforces to complement a surge in AI-related workflows and knowledge. Here are just a few examples of how companies are offering professional development accounts to their people as part of their overall benefits strategy:

1. Help Scout: Help Scout has a “Learn Something Stipend” where each of the near-150 employees are given $1,800 to spend annually on learning.

2. Olark: Olark has a professional development budget of $2,000/year to use on classes, books, software, conferences, etc. — whatever helps their team of 20+ remote employees learn.

3. Balsamiq: Balsamiq gives their 30+ employees $3,000/year to spend on books, classes, or travel, accommodation, and fees for attending conferences.

4. Smartsheet: On the enterprise level, Smartsheet provides their 4,200+ employees $1,000/year to spend on learning-related items.

5. Slack: Also for enterprise tech, Slack’s 3,200+ employees receive $500 annually towards a personal development opportunity of their choice and $2,000 annually for professional development.

6. One of our Compt customers in the financial industry has an annual $5,000 professional development program for 600+ employees that also includes tuition assistance, available to full-time, regular employees. 

7. In the healthcare space, one of our Compt customers has a case-by-case basis program for professional development, where there’s no official budget, but employees can submit their requests for approval. This is mostly used for renewing certifications across their medical professional base of 50+ employees. 

Tuition reimbursement trending upwards

Depending on your organization’s size and budget, what you can offer your employees for professional development can vary. Though it comes at a higher cost, we see many employers recognizing the burden of student debt on employees’ financial wellness. 

According to our 2025 Lifestyle Benefits Benchmark Report, repayment options grew from 6.8% to 12% of non-taxable spending among Compt customers, marking it a key tool for attracting and retaining top talent.

In a tuition reimbursement benefit, a company sponsors some or all of the cost of new coursework, with the employee paying for their course upfront and then the employer paying back a portion or the full cost upon completion. 

According to IRS Guidelines, employers can offer each employee up to $5,250 of tax-free educational assistance each year. Anything over that is subject to income tax. 

Psst: Check out more tips and guidelines on how to create a successful employee tuition reimbursement program.

Employee Examples of Professional Development Claims

At Compt, we’ve seen that ‘professional development’ can mean a lot of different things, proving a one-size-fits-all experience with dated course libraries or limited options needs to be a thing of the past. 

Our report showed that employees chose to spend their professional development dollars at more than 2,500 vendors. Here are a few (OK, 10…) of our favorite examples from Compt customers: 

• Book titled – “Work Like a Boss: A Kick-in-the-Pants Guide to Finding (and Using) Your Power at Work”
• ‘2 online courses in UC Berkeley Extension Program’
• ‘A non-taxable $500 tuition deposit for an online graduate degree in media studies’
• ‘Student loan repayment’
• ‘Project management certification exam’
• ‘AI-powered writing assistant’ 
• ‘Career coaching’ 
• ‘Harvard Business Review subscription’
• ‘Productivity book “Smart Phone, Dumb Phone Free Yourself”’
• ‘Course on improv for therapists’

Here’s a look at the different types of categories a professional development account could encompass, based off of Compt customer utilization data: 

Unsurprisingly, while the categories vary, the claims showed a strong focus on AI-related professional development needs, with AI being mentioned hundreds of times across thousands of claims. 

How to Launch a Successful Professional Development Account

Putting a professional development account in place requires structure, processes, and guardrails so that both employees and employers understand what’s involved. 

From approval processes to reimbursement workflows, making sure your employees are aware of what’s available to them and that all administrative functions (which could be anyone from line managers to finance to HR!) have the proper permissions … there’s a lot to think about when it comes to putting in place a successful professional development account. 

Without the right structure in place, you’re at risk of employees making purchases without proper approval, over-taxing (or under-taxing) purchases, or missing an opportunity for employees to use a benefit (since they don’t even know it’s there!). 

But not to worry, we’re going to break it down for you. Here are the four core steps you’ll want to follow to set up a professional development account or stipend program: 

1. Identify your current number of employees and your total budget for professional development.
   
   The funding ranges for professional development among Compt customers varies from a minimum of $100 per employee, all the way up to $2,000, with our average customer funding $1,140 annually. Keep in mind that if your budget can’t accommodate, say, funding full tuition reimbursement, there are plenty of other ways to support your employees’ professional development.

There are three different types of budgeting we’ve seen in professional development stipends. Here’s a look at these approaches: 

• A case-by-case basis: There’s no set budget per employee or department, and requests are reviewed individually. This may make sense for smaller organizations that aren’t anticipating high takeup of this benefit. 
• Individual budgets: The employer sets a specific budget per employee and determines the timeline (monthly, quarterly, or annual). 
• A group or shared budget: Employers allocate funds by department, location, or team. For example, your engineering department may require a larger budget based on employee headcount vs. your HR department. Or if you have dispersed employees, you may need more budget for your larger offices versus smaller, satellite offices.

Professional Development Pro™ by Compt lets you take this one step further to allow for endless customization options where you can segment by country, department, or any other HRIS-defined attributes (manager level, etc.). 

2. Next, you’ll want to set your eligibility criteria. Who can take advantage of this new benefit? This might be different by location, department, seniority, length of employment, etc. 

For example, you might not want your professional development account to kick in until an employee has been with the company past a probationary period, or the amount in their professional development account may increase if they are a manager-level versus an individual contributor. 

3. Figure out workflows and processes for approvals, requests, and reimbursements. This part can be tricky, but luckily, Professional Development Pro does all the heavy lifting for you by keeping your workflows in check so your team never misses an approval request, and employees aren’t kept waiting for their reimbursements. 

You’ll want to define who approves your professional development requests, and how many layers you need. A sample workflow might look like something like this: 

• Manager receives a pre-approval request from their employees.
• A secondary approver (maybe HR or a department lead) approves the request based on budget. 
• Once approved, the employee submits a receipt for reimbursement. 
• Reimbursement is reviewed and approved (typically through finance or payroll).
• Employee is reimbursed. 

We’ve heard that this is where the bottlenecks occur most, which is why Compt Professional Development Pro keeps all of this in one, centralized place. No more endless email threads or missed communications (or unhappy employees!). 

4. The last step is to communicate your new benefit to your employees! 

This is the exciting part. Draft up an email, host a page on your internal wiki, or train up your managers to promote your new benefit in their one-on-ones.

Remember to explain the why, what, when and how details, so employees understand the value of the new benefit and how they can use it. 

If you’re a Compt customer, we’ll automatically send invites to your employees to announce the program with additional periodic reminders to keep usage steady.

Plus, we’ll provide you with talking points and information for your employees to make this process super simple. 

3 top tips to maximize your professional development usage

Here are a few other best practices to keep in mind, based on what we’re seeing our Compt customers put in place with their own professional development accounts:

Make it annual. 

Out of our customers who offer an exclusive professional development stipend, 60% of them offer one annually to their employees. This helps employees access funds when they’re needed year-round, which is perfect for annual subscriptions or one-off purchases. 

Offer choice. 

It’s important to recognize different learning styles as well as varying employee needs. Your management team will need different on-the-job skills than your frontline employees, yet each could benefit from extra support. So why not let them chart their own professional development journey? Find an option that provides maximum flexibility in funding so employees can tailor development to their own personal needs. 

Don’t be scared to start small. 

Extra support is better than no support. If your company can’t invest in tuition reimbursement, consider a smaller stipend to start with, like a $100 yearly account for books or productivity tool subscriptions. Books made up a quarter of all Compt customer professional development claims in 2024! 

Professional Development Pro™

The new way to deliver professional development accounts to your people

The old ways of delivering professional development just isn’t working anymore. Today’s employees (and their employers) deserve a better experience that’s easier for them to use and for their leaders to administer. That’s why we’re introducing Professional Development Pro to streamline requests, approvals, and budget tracking, eliminating complex workflows and empowering employees to grow and develop.

Our standard stipend program allows employers to offer stipends within the Professional Development category.

However, Professional Development Pro brings it up a level with key product enhancements unique to professional development programs, including:

Automated program management

One central hub that brings all of your requests, approvals, reimbursements, and budget tracking together to reduce stakeholder admin time.

Infinitely customizable budgets and approvals

Configure individual or shared budgets, set eligibility by role, location, or custom groups, and automate multi-level approvals to design robust and flexible programs.

Learning recommendations

Employees discover top resources used by peers in similar roles with verified reviews to maximize learning investments.

Real-time reporting

Track engagement, spot trends, and see the impact of your program with instantly available reporting.

Professional development accounts and stipends are proven to boost retention and attract top-tier candidates, while showing employees that at the end of the day, their company believes in their contributions and wants to help them excel. Isn’t it time to launch a professional development account that your people (and your HR team) will love?

At Compt, we want to make professional development more accessible, visible, and, most of all, easy to administer. Get in touch with us today to learn more about Professional Development Pro to build a tailored professional development benefit that’s right for you and your people. 

Frequently Asked Questions (FAQ) on Professional Development Accounts

Is a professional development account taxable? 

This depends. If these expenses qualify as work-related expenses, then they would fall under a working condition fringe benefit and would be deductible business expenses for the employer and tax-free for the employee. Or, if the employer offers an Educational Assistance Program for student loan repayments, then professional development benefits can be tax-free up to the IRS limit of $5,250 per employee. Professional development outside of these cases would generally be considered a taxable benefit. 

Is a professional development account considered a fringe benefit?

Yes, professional development accounts and stipends are considered a fringe benefit. Also known as a lifestyle benefit, these benefits can include wellness stipends, tuition assistance, childcare reimbursement, or employee discounts, to name just a few, which have specific tax allocations. (And yes, Compt helps you categorize these into taxable vs. non taxable to make compliance easy!).

Are professional development stipends reported on W-2? 

If the expenses do not qualify as exempt from employment tax (see taxable question above), then employers must report stipends on their employees’ form W-2 as taxable income, and they’ll also be required to withhold state and federal taxes accordingly. 

Who is eligible for a professional development account? 

Eligibility varies by employer, but typically this is limited to a full-time employee who has been with the company for at least a year. This also could depend on the benefit provided, for example, reimbursement for a professional development book is much different than needing to be reimbursed for long-term coursework. Companies can require different waiting periods or different approval needs. 

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.

The post What Is a Professional Development Account? appeared first on COMPT.