Remote Working Stipends: What they are and how we implemented ours

When you examine the overall cost of remote work, it might seem like it’d be considerably less than heading to the office. But successful remote work relies on other factors. Other than a laptop and phone, you need high-speed internet, you need a desk and (comfy) chair, and you need to have access to a suitable working environment. There’s also the issue of the portion of electricity and heating bills that go entirely towards working for your employer – who pays for those?

As many of us now know, working from your couch gets old fast. If your laptop is too slow and you need to buy a new one, who pays for it? If your internet isn’t fast enough, who forks out for an upgrade? If you need to turn a spare bedroom into an office, who pays for a new desk and chair? If you’re unable to work from home, who pays for a co-working space? Most of us would agree that expecting employees to shoulder the costs of working from home is wrong – and this is the precise reason why many people are talking about remote work stipends right now.

What is a Remote Working Stipend?

Remote employee stipends are fixed and paid outside of normal earnings.

A remote working stipend is an allowance given to employees who are working fully remotely for a company. It's normal to think about these stipends as a tool to reimburse the employee for any expenses they incur while doing their job from home, be it internet, office supplies, or childcare.

At Circular we like to think of these remote work stipends as a form of support from the company in order to guarantee employees have everything they need to deliver their work from a remote space and improve their lives through support of any kind.

Some companies offer remote working stipends as part of their benefits package for employees who are not based in one of their company's offices in order to help them maintain a flexible lifestyle.

Although remote work stipends and reimbursements are generally optional for the employer, some recent regional employment laws stipulate that an employer must cover work-related expenses for remote employees (As is the case in Spain where employees who work at least 30% of their total hours remotely within three months are entitled to reimbursement).

Stipends are as varied as the companies that employ them and can be paid once as a lump sum or regularly - monthly, annually, or however, your company sees fit.

Alternatives to Stipends?

Alternatively, your company may choose to reimburse recurring remote employee expenses, like internet access or a cell phone plan, rather than provide a fixed-sum stipend. But remember, your company expense policy should also include specific guidance on what employees can expense, and for what amount - for example, a budget of up to 200€ for a desk chair.

How Much should the Stipend be?

The average home office stipend amount varies from employer to employer, depending on their budget and what expenses they wish to cover.

For example, some tech companies like Twitter, Shopify, and Basecamp introduced a $1000 one-off payment to help employees set up their home offices.

When building a remote-friendly or remote-first benefits package, you should budget for at least the essential resources your remote workers need to be comfortable and work at their best. While it’s not cheap, disregarding your teams’ basic needs will cost you more in the long run as employees seek more attractive work environments elsewhere.

What Do Work-from-home Stipends Cover?

Stipends can cover a lot of things, it is important though to not confuse or mix the stipends with other benefits, like for example medical insurance or (as is the case in Circular) the home office set up (Home office set up in Circular is part of the onboarding and you get a Monitor, Laptop stand and Chair).

So what should a stipend cover? The quick answer is the essentials needed to work from home. But this will vary drastically between companies. Basics include:

• High-speed internet and cell phone packages
• Office equipment like ergonomic chairs, laptops, and extra monitors
• Role-specific tools
• Access to co-working spaces so employees can work in an office-like environment if they wish.

Stipends don’t just need to cover basic setups, most home office stipend policies also include so-called ‘soft’ employee benefits, which go beyond the standard offering but help keep employees engaged, productive, and happy.

Generally, these stipends cover:

meals or occasional treats, access to well-being tools and services, a learning and development budget, and a host of other perks.

• Meals
• Wellbeing tools and services (Separate from heath Insurance)
• Learning and development budgets
• Other perks

Your company could also cover costs for general household services, like childcare and cleaning services, which give employees more headspace to focus on their job during working hours.

Do you need to offer remote stipends?

Too often, companies treat remote work as an employee perk, or an opportunity to cut business costs. The truth is that remote working benefits companies just as much as it does employees.

Rather than simply pocketing the savings made from remote work, ethical companies understand that their most important assets are their people – and it’s in their interest to look after them. More and more companies are realizing that if they want their employees to be as productive and happy as they were before, they will have to fork out.

While remote employees can’t expect stipends for everything – allowances for “non-essential” work equipment are given entirely at an employer’s discretion – certain operational costs should certainly be covered by their companies. Rightful compensation for incurred business expenses is not something employees should have to trade for the “desirable” opportunity to work from home; it’s a basic right.

Here’s How to Set Up a Remote Work Stipend

Setting up a remote work stipend is not a complicated task but it's one that if not done properly can have a negative impact. There are three main points to consider and define before the implementation.

1. Determine how much you want to offer your team members within what timeframe. Will you give a one-off? a monthly stipend or an annual one?
2. Select your perk spending categories. What do you want the stipend to be spent on? Most often the typical spending categories tend to be health and wellness, continuous learning, family, or travel expenses. Looking for ideas for spending categories beyond a remote stipend? consider tying them to your company's culture, goals, or important cultural initiatives
3. International team? Make sure to check the labour law in the countries you are going to deploy this and create an internal process that is aligned with them - How you are going to register those expenses (invoice, payroll), are all the categories that you are offering legal in every country?
4. Decide how you’ll manage the process. It’s important to set up a process to track purchases, receipts, balances, approval and paid perks, as well as rejections or ones which need further review.
5. Use a Global software tool, there are a lot of benefits platforms that are now creating a feature for remote expenses. Think ahead and look for a tool that covers your expansion and distributed teams