The remote work stipend: What should you offer in 2025?
Learn what remote work stipends are with BuddiesHR, what they cover, how much to offer, and how to launch a simple, needs-based policy your team will appreciate.
Let’s take a moment to talk about remote work. It’s not just about being comfortable in your own home, skipping the commute, and no one looking over your shoulder. It also means higher internet bills, more electricity usage, and many times a takeover of the kitchen, dining room, or lounge area. It’s an intrusion into work-life balance - even if workers desire it, a whopping 95% according to one survey.
If you’ve recognized this and are looking for ways to keep remote workers plugged in - and productive, then a work-from-home stipend may be exactly what you need. We’re here to help you get it set up.
💡Quick stat: According to a SHRM survey (2022), 62% of U.S companies offer a remote work stipend to cover their employees’ expenses, with an average remote work allowance of $891.
What is a remote work stipend?
A work stipend is an allocated allowance given to remote employees to help cover expenses such as office supplies, office equipment, internet access, and other legitimate home office costs. Think of it as a small budget allocated for home office setup - whether it's a monthly stipend or a once-off payment.
Why offer a remote work stipend?
According to U.S. Career Institute statistics, companies can save up to $10,600 per employee if they allow employees to work remotely. [1] Taking the average work-from-home stipend of $891, that’s still a $9,709 savings per employee. The same statistics showed that remote workers can save up to $12,000 a year by not having to pay for travel, office clothes, and lunch, but the costs of running a home office can erode this saving, and a stipend balances the scales.
If we’re talking about being engaged and more productive, then less financial stress for employees is a good way to keep them focused on their jobs. Not only that, but a remote work allowance will help your company stay competitive in attracting key talent.
Types of remote work stipends
There are three main types of home office stipends:
- One-time home office setup: Financial support for the employee’s home office setup. This can include office furniture, technology, home office equipment, desk chair, home office supplies, ergonomic chairs (often seen as a wellness benefit), and internet connection.
- Monthly or recurring work stipend: A regular payment for work-related expenses such as the employee’s home internet costs, cell phone bills, utility bills, meals, and co-working software subscriptions.
- Reimbursement model: Employees pay for remote work expenses and submit a claim for approval, often under a budgetary limit.
Your company’s work-from-home model may include a mixture of the three stipends. The key is to stay flexible in your approach and decisions. For example, Small concessions such as an ergonomic chair may mean a huge increase in employee satisfaction.
How much should you offer?
Your stipend program or benefits package (sometimes used interchangeably) should be carefully structured according to your individual company's needs and financial capabilities. However, in 2025, the following work-from-home expenses are considered typical:
One-time setup stipend
The range for this lump sum payment is between $500 to $3,000, but the common average is $1,000 to $1,500.
What others are doing:
Monthly stipend
Monthly stipends provide regular support for remote employees. Often provided in the form of an expense account with a linked company credit card, and subject to authorization. These stipends range from $50 to $500 a month, with an average remote work stipend of $150.
What others are doing:
Many companies do not publish their stipends or the monetary value of their benefits packages, but searches reveal that work-from-home stipends are included in the benefits lists of several well-known, international, and smaller companies, especially in industries that have implemented remote-first working models.
Is the remote work stipend taxable?
Yes. Stipends are generally considered taxable income, but how they are taxed depends on the state or country that the remote worker lives in. There are ways of creating tax-relief stipend programs, such as:
- Offering remote employee reimbursement instead of flat stipends.
- Creating an accountable plan where the company provides a business credit card for eligible expenses, with set limits.
Federal law may require your industry or business to adopt a specific structure for home office expenses or reimbursements. These laws should form the foundation of your stipend program.
U.S state compliance
Some states in the U.S have local laws in place that require expense reimbursement for work expenses. Businesses in California, Illinois, Massachusetts, Montana, Iowa, New York, Pennsylvania, Washington, New Hampshire, North Dakota, South Dakota, and D.C. can check this information on local government websites or with tax experts.
How to launch or adapt a policy for a remote team stipend
No need for a whole team of legal experts and a 20-page document that takes a year to draft. You can get going now with these steps, and then scale to your needs.
1. Survey your team
Most remote teams are on platforms like Slack. Run a survey among your current remote workers to find out what they really need for their home office setup and their monthly expenses.
By using a Slack first app, such as Pulsy Survey from BuddiesHR, you will not only be able to track your team's responses, but also easily analyze the incoming data. Pretty soon, you’ll have an accurate idea about whether faster internet and noise-cancelling headphones are really necessary.
2. Choose your approach
Once you’ve identified what your employees truly need and the local regulations governing stipends, you can create a system that effectively supports remote team members.
Flat stipends are easy to manage, but a reimbursement model might be more beneficial if you want to provide your employees with some tax relief. Even if you ultimately adopt a hybrid work model, ensure that it fosters a positive working environment.
3. Set clear guidelines
Managing expectations is key when it comes to remote work. Most workers will use their stipend to purchase home office equipment and be reasonable about the costs, but every once in a while, you’ll encounter someone whose ideas are out of line with company expectations.
If your company culture is about being flexible and giving your workers the freedom to decide for themselves what they need to be productive, a monthly flat stipend could be the best solution, provided they understand it is likely to affect their taxable income.
Discuss the pros and cons of the different models as you scale the program. Remote workers should not be given excessive benefits in relation to their in-office counterparts because this could cause dissatisfaction amongst your employees.
Now, what about if someone doesn’t spend their stipend? If it’s a flat fee stipend, you can decide how to use it. They will likely be taxed, so if they don’t use it, they may want to opt out.
4. Budget accordingly
When the guidelines are clear, and before you inform the team, it’s time to involve the finance department (or a designated person). Crunching the numbers before publishing the policy is a critical step in ensuring you can meet financial obligations. Offering remote work stipends is a great idea for employee engagement; they are truly appreciated, but good financial management is also important.
5. Automate the whole process
There are a number of high-quality automation tools in the market that can help you manage your stipend program. Once you've settled on your policy and the costs, it’s time to choose a platform that can essentially run the entire process for you, from expense tracking to automated reimbursement (including reimbursement and hybrid models).
The expense management tools allow your remote employees to electronically submit their expense reports for a one-click approval, while publishing real-time expense information.
Final thoughts about remote work stipends
Remote work is no longer an exception. With 79% of managers feeling satisfied that remote workers are more productive, the positive impact is likely to make remote work more popular. [1] Offering stipends shows your team that you’re responsive to their needs and that you’re willing to invest in their ongoing success.
From what we’ve discussed, you could say that a stipend program doesn’t have to be expensive, and often it’s not - it just has to be thoughtful. So, whether you are a start-up with five people or a distributed workforce with 100 or more people, remote work stipends are valuable, not just for productivity, but also for loyalty, trust, and morale. And who doesn’t want that?
Stipends are just one way of building employee engagement and culture-driven workplaces, but they’re only one component. With BuddiesHR, you get a full suite of tools designed to support your people, from recognition programs, time-off tracking, performance reviews, and culture insights to relationship building. It’s everything you need to keep employees connected, supported, and thriving — all in one intuitive platform.
👉 Learn more at BuddiesHR.com and discover how easy it is to build a workplace people love.
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