A remote work allowance is a stipend or reimbursement employers provide to cover expenses employees incur while working from home or another remote location.
Remote work allowances help organizations maintain productivity and employee satisfaction by offsetting various costs associated with remote work setups. These expenses typically include internet service, office supplies, utilities, and essential equipment to create an efficient home workspace.
Companies implement these allowances as part of their compensation packages to attract and retain talent in an increasingly digital workplace. The allowance structure varies significantly across organizations and countries, with some offering fixed monthly payments while others opt for expense-based reimbursements.
While remote work allowances were historically less common (only 20-25% of companies offering work-from-home stipends as of 2021), a 2022 SHRM survey found that 62% of employers offer their employees a stipend or reimbursement for home office equipment.
Since our legal team knows the ins and outs of remote work policies in more than 185 countries, we’ve written a guide to remote work stipends for businesses.
How much does remote vs. in-office work cost?
Remote work creates a significant shift in cost distribution between employers and employees. Reports indicate companies can conservatively save upwards of $11,000 annually per remote employee through reduced office space, utilities, and operational costs. In many cases, these savings often transfer expenses to employees.
Employers are responding to these employee-absorbed costs that weren’t present in traditional office settings. Data from Buffer shows an upward trend in companies supporting remote work expenses, with 64% now covering hardware costs like devices and computer equipment, while 40% pay for office furniture like desks and chairs (but only 28% cover internet expenses.)
In the U.S., eleven states mandate reimbursement of necessary work-from-home expenses for remote professionals, especially when remote work is mandatory rather than optional or hybrid.
For 2025, companies typically structure remote work allowances in two ways: through formal accountable plans that require expense documentation or fixed monthly stipends. When implemented, these stipends generally range from $250 to $2,500 annually.
A 2024 survey revealed that 56% of companies offer some form of work equipment reimbursement, showing a growing trend toward supporting remote work expenses.
What are remote work stipends for?
Employers give their workforce remote work allowances to reduce some of the financial burdens of remote work, like energy bills or internet access. Since companies no longer have to pay for office space when they transition to remote work, they can allocate that money to support employees.
Remote work stipends vary by company size, industry, and budget. Here are common examples of monthly remote work allowances that companies typically provide:
- $100-150/month for internet service
- $50-100/month for utilities and electricity
- $75-200/month for home office supplies and equipment
- $250-500/month for coworking space access
- $1,000-3,000 one-time payment for initial home office setup
- $1,000/year for career development opportunities
Of course, these perks vary widely. Some employers offer stipends to encourage self-care and physical or mental health rather than practical aspects of the home office. In these cases, employees can spend their allowance on massages, gym memberships, groceries, or other life necessities to promote well-being.
What should employers provide to remote workers?
There is no one-size-fits-all approach to remote work allowances. Larger organizations with bigger remote budgets can provide more comprehensive employee benefits packages than smaller businesses with smaller teams.
The bottom line is these stipends are meant to support dispersed employees’ ability to work, health, and well-being. Allowances that employers may choose to provide for remote employees include:
- High-speed internet reimbursement or stipend
- Essential technology (laptop, monitors, peripherals)
- Ergonomic office furniture (desk, chair)
- Monthly utility/electricity allowance
- Virtual wellness resources and mental health support
- Professional development and learning budgets
- Coworking space membership options
- Home office setup allowance
Most common in the technology sector, more and more companies are taking initiative with remote work allowances. Below are a few notable examples of companies supporting their distributed workforce:
- Humana requires remote employees to have specific internet configurations, so they offer bi-weekly internet expense payments for employees who live and work from home in California, Illinois, Montana, or South Dakota. The company also provides necessary telephone equipment for remote workers.
- GitLab focuses on competitive base salaries and location-based compensation packages rather than specific remote work stipends—supporting their fully distributed workforce across more than 60 countries.
- Shopify offers a $2,500 annual lifestyle spending account for home office equipment and work-related expenses. They recently discontinued their $55 monthly internet reimbursement program.
- Buffer combines a $500 initial home office setup allowance with a $200 monthly stipend for “coffee shop working” and a $200 annual technology accessories budget.
- PwC has adopted a hybrid work model where employees spend approximately 50% of their time working remotely. The company offers flexible arrangements, including reduced schedules, and emphasizes work-life balance through personalized benefits and resources.
Get our guide to learn how to offer compliant, competitive benefits packages that help attract and retain top global talent and gain a hiring edge:
Benefits of remote work allowances
Remote work allowances can make dispersed teams feel supported without business owners funneling money into the wrong areas. With general stipends, employees have more control over their perks.
Puts the focus on culture
Investing in remote employees fosters an organizational culture that demonstrates commitment to worker well-being. When organizations provide thoughtful benefits, employees feel valued, leading to improved productivity both during and outside work hours. A positive remote culture naturally boosts retention rates and enhances recruitment efforts.
Example: Remote employees who spend long hours at their desks may experience physical discomfort or feelings of isolation. Providing allowances for ergonomic equipment or wellness programs shows organizational investment in employee health, contributing to higher job satisfaction and engagement.
Sets employees up for success
Equipping remote teams with the necessary tools and resources should be a goal for every leader. Ensuring all members have access to essential equipment and services creates an environment conducive to productivity when building distributed teams.
Example: Remote employees in certain regions might struggle to access high-speed internet without financial support. A monthly connectivity stipend ensures reliable access to essential communication tools and collaboration platforms.
Gives employees control of their benefits
Traditional office perks aren’t always appropriate for remote environments. Stipends allow employees to allocate resources toward their specific needs while organizations avoid investing in underutilized benefits.
Example: Rather than spending money on specific devices or hardware needs, organizations can provide health and wellness-related stipends that allow remote employees to purchase what best suits their needs.
Enhances work-life integration
Remote work allowances help employees create optimal work environments that blend seamlessly with their personal lives. This integration leads to better time management and reduced stress levels.
Example: Providing stipends for coworking spaces or home office setup allows employees to design workspaces that match their working styles and home situations.
Promotes professional development
Dedicated allowances for learning and skill development demonstrate the organization’s commitment to employee growth and support career advancement in a remote setting.
Example: Organizations can offer annual learning stipends for online courses, certifications, or virtual conferences, enabling continuous professional development regardless of location.
What is remote work tax relief?
Taxes for remote employees can be complicated. In some countries, employees are eligible for relief for their remote expenses. Remote tax relief usually works in one of two ways:
- Remote employees pay less in taxes to account for utilities, work equipment, etc.
- Remote employees receive tax refunds to account for the money they spend on utilities, work equipment, etc.
Essentially, these programs aim to provide some financial relief to employees who work from home. However, they are far from universal worldwide and vary widely from country to country.
In the U.K., tax relief is only available for mandatory remote work arrangements, not voluntary ones. Eligible workers can claim up to £6 per week, plus additional amounts spent on gas, electricity, metered water, and business calls.
There is no federal law in the U.S. for remote work tax relief. While some states provide relief options, the regulations vary by jurisdiction. Generally, U.S. tax deductions for home offices are limited to self-employed individuals.
Remote work allowance FAQs
Understanding remote work allowances and their tax implications is crucial for both employers and employees in today’s distributed workforce environment.
Are remote work stipends taxable?
Cash stipends or advances for home office supplies or expenses are generally taxable, while reimbursements for supplies under an accountable plan are not. For reimbursements to qualify as non-taxable fringe benefits, expenses must be “ordinary and necessary” and properly documented within 60 days. Equipment provided by employers, such as computers or cell phones, typically isn’t considered taxable income even when used for personal purposes.
Should employers reimburse for the internet?
While federal law doesn’t mandate internet reimbursement, 11 states plus Washington D.C. and Seattle now require employers to reimburse certain remote work expenses. According to Buffer’s 2023 State of Remote Work report, only 28% of companies currently pay for employees’ home internet costs, while 44% of remote workers express a desire for internet expense reimbursement.
Who is eligible for remote tax relief?
Remote work tax relief primarily applies to self-employed individuals and independent contractors. Remote W-2 employees cannot claim home office deductions on federal tax returns due to the Tax Cuts and Jobs Act. Eligibility varies by state, with some jurisdictions maintaining additional provisions for remote workers.
What can remote work stipends be spent on?
Remote work stipends typically cover essential business expenses such as home office equipment, internet connectivity, and utility costs. Some organizations structure stipends as monthly allowances ranging from $100 to $500, while others provide one-time setup payments between $1,000 and $3,000. Specific eligible expenses should align with company policies and applicable state regulations.
A global partner for remote teams
Remote work allowances and tax breaks vary around the globe. Employers with dispersed teams may want to offer this benefit to their remote employees but must overcome complex legal hurdles to do so. Fortunately, working with a partner like Velocity Global can make a world of difference.
Velocity Global’s Employer of Record (EOR) solution simplifies this process through its Global Work Platform, enabling organizations to compliantly manage remote work allowances and benefits across 185+ countries. The platform helps manage everything from global payroll processing to benefits administration to help ensure compliance and employee satisfaction.
Contact Velocity Global to learn how our comprehensive EOR solution can help streamline your global workforce management while maintaining competitive benefits that attract and retain top talent worldwide.
