Who’s Paying for What: Negotiate Reimbursements if Boss Gives up Office for Good
A lot of employees are keen on remote work after being thrust into this giant experiment by the COVID-19 pandemic. But employees aren’t the only ones.
Since the start of the year, major companies including Salesforce, Zillow and cryptocurrency platform Coinbase have announced they’ll institute new modes of work, including flexible hours, remote workforces or even shuttering their offices.
Yeah, working from home is a perk for employees — but I’m guessing companies are also coming to terms with just how much it costs to keep the lights on.
Is your company jumping on the bandwagon and considering a permanent work-from-home option — or requirement — after the pandemic? Don’t get stuck shouldering the costs.
Here are some tips to make sure you get compensated for the power, Wi-Fi, technology, supplies, office space and other costs it takes to get your job done.
What Can a Remote Work Stipend to Pay For?
If you’ve only thought of remote work as a temporary fix this past year, you might not realize all the work-from-home costs you could incur by making it a permanent situation.
Think about everything you need to do your job that’s usually just there and waiting for you when you walk into an office. Companies might routinely pay for some of these, but others might be going unnoticed and costing employees money over time.
Computer (and Accessories)
Whether you use a desktop or laptop computer, the hours you spend on work tasks put a strain on it. Does your employer supply computers for the staff, give you money to buy your own or compensate you with a regular stipend to cushion the cost of replacing and repairing it?
A lot of people have been getting by with a laptop during the pandemic, but what about all the other stuff that made your life easier at the office?
If this is a permanent situation, a laptop stand, monitor, and bluetooth mouse and keyboard are more than nice-to-haves — consult your wrists, shoulders and back, and they’ll tell you these are must-haves. Think about the chair you’ll be sitting in and the desk you need.
Software and Subscriptions
It’s likely your employer routinely pays for the programs you need to do your work, but this is a good time to check in and make sure you’re not shouldering extra costs to get by at home.
Are they paying for the proper Zoom subscription to let you host meetings and client or customer calls as you need to? Do you need a license to use necessary software on your personal computer? Does remote work necessitate more cloud-drive space or new communications apps?
Phone and Internet Service (and Devices)
If you’re routinely using your smartphone to communicate with coworkers, customers and clients, you could ask for some compensation for the device and service.
Your company might prefer to buy you a whole new phone and line to get you on a company-paid plan — but many are willing to just give you a stipend or partial reimbursement to contribute to the cost of your personal phone so your life isn’t a complicated mess of iPhones.
Similarly, your employer relies on your internet connection when you work from home. You don’t have the option to go off the grid, so… shouldn’t they be willing to chip in a little to keep you on it?
Battling a bad internet connection at home? Here’s how to work from home or homeschool with slow internet and some options to get better internet without a cable connection.
This is all especially true if you’ve had to upgrade your internet service or data plan to accommodate working from home — you can directly correlate those costs to work.
Office Supplies and Furniture
Offices have tons of stuff available for free that employers would never expect employees to bring into the building. Think: printers, fax machines, paper, ink cartridges, notebooks, pens, sticky notes, file folders, desks, chairs …
Honestly. Imagine a company telling you you have to bring in your own desk chair. Yet, when you work from home, that cost falls on you.
Lots of fully remote companies provide new employees with an upfront stipend for home-office setup. This is a smart perk, and you should see if your employer is willing to offer it.
Printing or Fax Services
You might only need to print or fax documents once in a while (because, 2021). So owning, maintaining and supplying a printer and fax machine doesn’t make sense.
See if your employer will cover your costs to use a printing and fax service like FedEx or a subscription with an online fax service like eFax.
Food, Drinks or Space for Client Meetings
You might meet in person with clients again once we’re free and clear of COVID-19. (Fingers crossed.)
If the office is gone, you have to find other places to meet up. Coffee shops, cocktail bars and restaurants aren’t huge fans of people using their spaces for work without buying stuff, so these meetings could cost you money.
Alternatively, you might negotiate a stipend for a membership at a coworking space or ask that the company that can be used by employees who need the meetup space. A coworking space might include a private office space or common area you can use for meetings.
Yes, working from home means significant reductions to your commute time and costs. But it might add new costs, like traveling to client meetings or in-person employee events.
How to Structure Home Office Reimbursements
You might work for an amazing company that’s all about flexible work and employee compensation and is already covering every possible expense you have or will encounter as a remote employee.
Or, you might have an employer who’s just figured out shutting down the office is a brilliant way to cut costs every month, forgetting (or not caring) that the cost shifts to employees.
Wherever your company falls on the spectrum, review the costs listed above to figure out which you’re incurring and how it adds up.
You could ask to have your expenses covered in one or more of these ways:
- Ad hoc reimbursements: You pay for everything upfront. Then you submit receipts and ask for reimbursement — usually on your next paycheck — for each expense.
- Ongoing stipend: Your company pays a flat rate each month or with each paycheck on top of your regular pay that’s meant to cushion the myriad expenses you cover out of pocket.
- One-time stipend: Your company pays a flat rate one time to cover the costs of setting up to work from home.
- Company purchases: Your company manages and pays for everything upfront, so you don’t incur the costs at all.
- Expense account: You get a company credit card or expense account, so you can choose products and services to purchase without incurring any costs or navigating reimbursement.
Your best option is probably a combination of these methods. An ongoing “device and equipment” stipend is great for employees working from home, because it lets you use the devices and office space you prefer without a ton of accounting. (It could, however, be taxable as income, which I’ll get into below.)
An ongoing stipend is also a simple way for the company to contribute to your internet and phone bills without somehow parsing out work versus personal use for each.
You might combine that with a one-time stipend to help with your initial home-office setup.
You could use a company credit card or expense account to cover sporadic expenses like client meetings, transportation and fax services, while the company could manage and pay upfront for software and subscriptions.
If you have to make the case to your company to institute new forms of home office reimbursement, start with new expenses you’ve incurred during the pandemic. It should be easy to see how you’ve picked up costs that used to fall to the company and how they directly contribute to getting your job done.
But don’t be afraid to push for more! Working from home is a sweet perk for many employees, but it’s a huge boon for companies, too, and they should be willing to compensate you for taking it on.
Is a Work From Home Stipend Taxable?
Whether your work-from-home reimbursements or stipends are taxable depends on how they’re structured.
You can’t claim a tax deduction for your home office space if you’re an employee, whether you get reimbursed or not.
Here’s the rub:
- Taxable: A stipend counts as part of your taxable income, subject to your normal tax rate, if the company pays it without a clear accounting of the business expenses it’s covering (like an expense account).
- Non-taxable: You don’t have to include reimbursements or stipends in your taxable income if you’ve provided expense reports to account for all the business expenses they cover.
This means you might want to consider how the structure of your reimbursements affects your income come tax time.
If you get a monthly flat stipend, for example, does your employer have a way to account for the costs it covers? If not, it gets rolled into your taxable income — and could end up as a wash in your take-home pay.
Dana Sitar (@danasitar) has been writing and editing since 2011, covering personal finance, careers and digital media