Offering robust employee benefits is crucial for companies aiming to attract and retain top talent. Beyond traditional benefits like health insurance and retirement plans, employee stipends are gaining popularity. These stipends are additional funds provided by employers to cover specific employee expenses, either as a one-time payment or on a recurring basis. Stipends offer extra financial support and demonstrate a company’s dedication to employee well-being and job satisfaction.
This article will explore various types of employee stipends, provide concrete examples, and guide you on how to effectively implement them within your organization. For those considering career advancement through avenues like coding bootcamps, understanding comprehensive benefits packages including stipends becomes even more critical when evaluating job opportunities, especially in fields where continuous skill development, as discussed in resources like www.monster.com career-advice article coding-bootcamp-lead-to-job, is highly valued.
Alt text: Happy employee at her desk, showcasing the positive impact of employee stipends on workplace satisfaction.
1. Health Stipends
A health stipend can be offered to help employees manage out-of-pocket medical costs and health insurance premiums. For smaller businesses that find traditional group health insurance unaffordable, a health stipend can be an effective way to assist employees in covering their individual health coverage.
It’s important to note that employers cannot mandate employees to provide receipts or invoices proving stipend usage for items listed in IRS Publication 502. Similarly, requesting proof of health insurance coverage is not permitted.
Expenses covered by a health stipend can include:
- Monthly health insurance premiums
- Doctor visits
- Prescription medications
- Emergency room services
- Over-the-counter (OTC) drugs
- Dental care services
- Vision care
- Alternative therapies like acupuncture and chiropractic treatments
Companies offering health stipends:
- Wattpad: Provides employees with a $500 healthcare stipend for expenses not covered by their primary insurance plan.
- Alliant Credit Union: Offers a $35 monthly stipend for health and fitness-related services and activities.
For a tax-advantaged alternative to health stipends, consider a health reimbursement arrangement (HRA). HRAs, approved by the IRS, allow employers to set a monthly allowance for employees to use on IRS Publication 502 listed items, including individual health insurance policies. Employees submit proof of eligible purchases for reimbursement up to their allowance.
Alt text: Comparison chart outlining the key differences between health stipends and Health Reimbursement Arrangements (HRAs) for employee benefits.
2. Wellness Stipends
Employee well-being is increasingly prioritized by companies aiming to foster a positive work environment. A wellness stipend can support employees’ physical and mental health. For example, a company focused on employee health might offer a wellness stipend for gym memberships, meditation apps, or yoga classes.
Wellness stipends are a valuable addition to benefits packages, addressing wellness expenses not covered by health stipends or HRAs.
Wellness stipend eligible expenses:
- Gym memberships
- Fitness class fees
- Wellness apps and subscriptions
- Home fitness equipment
- Wearable fitness trackers
- Healthy meal delivery kits
- Nutritional supplements
- Personal training sessions
- Wellness retreats
- Mental health therapy
- Massage therapy
- Chiropractic care
- Recreational sports leagues
Examples of companies offering wellness stipends:
- Calm: Provides a $100 monthly wellness stipend for employee happiness and health.
- Basecamp: Offers a $100 monthly fitness allowance and a separate $100 monthly massage allowance.
- Peloton: Reimburses full-time employees up to $500 annually for wellness event registration and sponsorship fees.
Alt text: Employee practicing mindfulness and meditation at their workspace, illustrating the benefit of wellness stipends for mental health.
3. Remote Work Stipends
With the rise of remote work, companies are recognizing the importance of supporting employees in creating productive home offices. A remote work stipend can cover expenses related to work-from-home setups, particularly beneficial for virtual teams.
Remote work stipend eligible expenses:
- Ergonomic office furniture like chairs and standing desks
- Office supplies
- Technology upgrades
- Noise-canceling headsets
- Webcams
- High-speed internet service
- Cell phone service plans
- Utility bill assistance
- Coworking space memberships
Companies offering remote work stipends:
- Calm: Offers remote employees a $750 work-from-home budget for home office setup.
- Zillow: Provides remote employees with a one-time $450 stipend for home office setup and a recurring $150 monthly stipend for ongoing remote work expenses.
- Almanac: Supports remote teams with a one-time $400 stipend for equipment and home office costs.
- Basecamp: Offers remote workers a $100 monthly coworking space stipend.
- Buffer: Provides remote employees a one-time $500 stipend for home office setup.
- PeopleKeep: Offers a monthly home internet access stipend to its fully remote workforce.
Alt text: Well-organized and ergonomic home office setup, demonstrating how remote work stipends enable employees to create productive workspaces.
4. Commuter Stipends
Commuting can be a significant source of stress and expense for employees. Commuter stipends can help alleviate transportation costs, showing employees their time and effort to get to work are valued, potentially increasing job satisfaction. This is particularly relevant for companies in urban areas where commuting can be costly.
While tax-free transportation benefits have IRS limits, taxable stipends allow for broader commuter benefit coverage beyond these limits.
Commuter stipend eligible expenses:
- Public transportation passes
- Fuel costs
- Parking fees
- Mileage reimbursement
- Rideshare services like Uber and Lyft
Companies offering commuter benefits:
- Ribbon Health: Provides pre-tax commuter benefits and complimentary bike-sharing memberships.
- Stellar Health: Offers free Citibike memberships to employees who commute by bike.
5. Travel Stipends
Travel stipends are a popular perk, encouraging employees to explore new places or attend industry events and conferences. They can cover various travel-related expenses. For instance, technology companies might offer travel stipends for employees to attend coding conferences or tech expos, aligning with career development opportunities often found through platforms like www.monster.com career-advice article coding-bootcamp-lead-to-job.
Travel stipend eligible expenses:
- Airfare, bus, or train tickets
- Hotel accommodations
- Baggage fees
- Passport application fees
- Vacation and leisure activities
- Bike and scooter rentals
- Dining allowances
Companies offering travel stipends:
- AirBnB: Provides employees with $2,000 annually to travel and stay in Airbnb listings worldwide.
- FullContact: Offers employees $7,500 for vacation travel.
- Afar Media: Offers unlimited vacation time and a $2,000 annual travel stipend.
- Moz: Provides employees with $3,000 annually for vacation expenses.
Alt text: Employee traveling with luggage in an airport, representing the opportunity for exploration and enrichment offered by travel stipends.
6. Technology Stipends
In the digital age, access to adequate technology is vital for employee productivity. Technology stipends assist employees in acquiring or upgrading work-related devices and software, especially beneficial for remote teams or roles requiring specialized software.
Technology stipend eligible expenses:
- Laptops
- Webcams
- Smartphones
- Software subscriptions
- Phone bills
- High-speed internet service costs
Companies offering technology stipends:
- Summit CPA Group: Provides new team members with a $3,000 technology stipend.
- Buffer: Offers employees an annual $200 technology stipend.
- Appcues: Provides a $1,000 home office stipend and an additional $500 annual budget for work-related technology.
7. Education Stipends
Encouraging continuous learning is critical for employee growth and development. Education stipends enhance employee skills and show commitment to career advancement. These stipends can be particularly valuable for employees seeking to upskill in rapidly evolving fields, such as technology, where coding bootcamps—often highlighted on career advice platforms like www.monster.com career-advice article coding-bootcamp-lead-to-job—are a popular route for career change or advancement.
Education stipend eligible expenses:
- Workshops
- Professional certifications
- Industry conferences
- Seminars
- Online courses
- Tuition fees for higher education programs
Companies offering education stipends:
- Chipotle: Offers certificates and full tuition coverage for specific programs, and up to $5,250 annually in tuition assistance.
- Kaiser Permanente: Offers $3,000 for employee tuition reimbursement.
- Allstate: Reimburses up to $5,250 annually for courses related to career paths within Allstate.
- Basecamp: Provides employees with $1,000 annually for continuing education.
- Olark: Offers employees $2,000 annually for continuing education.
Alt text: Employees participating in a professional development training session, demonstrating the value of education stipends for career growth.
8. Professional Development Stipends
Beyond education stipends, professional development stipends allow employees to invest in activities enhancing their broader professional growth. This can include conferences, workshops, or resources to stay current in their fields.
Professional development stipend eligible expenses:
- Professional association memberships
- Conferences
- Workshops
- Webinars
- Online courses
- Books and audiobooks
- Certifications
- Educational assistance
- Student loan repayment programs
- Training costs
Companies offering professional development stipends:
- Buffer: Provides an annual $850 stipend for conferences, courses, and coaching.
- Wyzant: Offers employees $2,000 annually for conferences, workshops, and other development opportunities.
- Help Scout: Provides a $1,800 “Learn Something” stipend for learning opportunities like conferences, online courses, seminars, and books.
- Peloton: Offers an annual $5,250 stipend for specific education-related expenses to support professional growth.
9. Childcare Stipends
Balancing work and family can be challenging for parents. Childcare stipends can significantly reduce this stress, increasing employee loyalty and productivity. This benefit supports working parents and fosters a family-friendly work environment.
Childcare stipend eligible expenses:
- Daycare services
- Backup care
- After-school programs
- Nannies
- Babysitters
- Tutoring services
Companies offering childcare benefits:
- Facebook: Reimburses up to $3,000 annually for childcare expenses.
- Snap: Offers subsidized backup child care for up to 80 hours per year.
- Peloton: Offers subsidized childcare and family care through partnerships for backup assistance.
- Ibotta: Partners with Helpr for care support, discounts, and assistance finding local care providers.
- Logikcull: Offers a concierge service for daycare support and a $1,000 allowance for new family members.
Alt text: Parent working remotely at home while caring for their child, highlighting the importance of childcare stipends for work-life balance.
10. Family Stipends
Family stipends offer broader support for employees’ family-related expenses, extending beyond childcare to include other family needs. This can help alleviate financial burdens and reduce stress, allowing employees to remain focused at work.
Family stipend eligible expenses:
- Childcare costs
- Fertility treatments
- Healthcare expenses
- Senior care
- Bereavement support
- Pet care expenses
Companies offering family benefits:
- Adobe: Offers adoption and surrogacy assistance up to $25,000.
- Pinterest: Provides employees up to $10,000 for adoption assistance.
- MassMutual: Offers 320 hours of caregiver leave for loved ones in need.
11. Meal Stipends
Meal stipends help cover food costs for employees, especially beneficial for those working long hours or traveling for work. They can ensure employees have access to healthy meals, boosting energy and productivity throughout the workday.
Meal stipend eligible expenses:
- Groceries
- Takeout meals
- Snacks
- Beverages
- Meal delivery services
Companies offering meal stipends:
- Valon: Provides lunch stipends and special food perks like Bagel Fridays and Tuesday night dinners.
- Snap: Provides a daily $16 stipend on a Snap Meal Card for restaurants and food delivery.
- Ribbon Health: Offers a lunch stipend for in-office employees.
- Morningstar: Provides free daily meals to employees.
12. Pet Stipends
Pet stipends are a unique and appreciated benefit, recognizing the importance of pets in employees’ lives. They demonstrate support for employees’ personal lives and promote work-life balance.
Pet stipend eligible expenses:
- Pet insurance premiums
- Pet daycare services
- Pet boarding services
- Grooming services
- Pet food and treats
- Veterinary care bills
Companies offering pet benefits:
- Rover: Offers employees $1,000 for adopting or fostering a pet and helps cover pet-sitting costs through Rover.
- Peloton: Offers pet insurance to employees.
- Ibotta: Offers discounts on pet insurance and related services.
- Clearcover: Provides employees with pet insurance.
Alt text: Employee happily working in the office with their dog, illustrating the pet-friendly culture supported by pet stipends and benefits.
How to Implement Employee Stipends
While companies can manage stipends internally, using a benefits administrator or software provider simplifies the process.
Determine your budget and design stipend benefits to align with employee needs. You can customize allowances based on location and employee classifications.
Offering employee stipends demonstrates employee appreciation and can attract new talent. Studies show that a strong benefits package is a significant factor for job seekers.
Taxability of Employee Stipends
Stipend taxability depends on the benefit type and reimbursed expenses.
Health and wellness stipends are generally considered taxable income as they are extra compensation. Income taxes may need to be withheld, and employees are taxed on reimbursed amounts.
While stipends aren’t wages for Social Security and Medicare taxes, taxable stipends are considered extra income on tax returns.
Some stipends can be tax-free or tax-advantaged. Consult IRS Publication 15-B and a tax professional for compliance.
Whether offering taxable or tax-free stipends, always seek guidance from an accountant or tax professional.
Conclusion
Offering diverse and relevant employee stipends can significantly enhance employee attraction and retention, improve the employee experience, and cultivate a positive work environment. Tailor stipends to your employees’ needs and company budget. Investing in employee well-being and growth creates a motivated and thriving workforce.
Explore tax-free HRAs as an alternative to stipends. Schedule a consultation with a benefits advisor today!
