The Ultimate Guide to Cell Phone Reimbursement Stipends

Updated January 16th, 2023

Is your team using their phone for work-related email, Slack, social apps and texts on their phone? Then you need a cell phone reimbursement plan.


In 2018, the Oxford Economics survey conducted a survey which found that 89% of organizations provide a full or partial stipend to compensate "bring your own device" (BYOD) employees for their mobile phone expenses. 

With such a large percentage of organizations offering this type of perk, that's why we developed this guide to everything you need to know about cell phone reimbursement stipends, also known as cell phone allowances or a telephone reimbursement.

Here's what is covered in this guide:

  1. What is a cell phone stipend
  2. Benefits of cell phone stipends
  3. Examples of cell phone stipends
  4. Cell phone stipends vs. work perk stipends
  5. Decide between COPE & BYOD
  6. How to create one for your organization

What is a cell phone stipend?

First, a definition:

A cell phone reimbursement stipend, or a cell phone allowance, is a sum of money given to employees for them to purchase on their cell phone plans.

Further details on what they are:

  • Stipends are often given out monthly.
  • To answer the question "are cell phone allowances taxable?" - no, it is a non-taxable benefit! This means it's a great one for the organization or employees, whomever would cover the taxes.

Benefits of Cell Phone Reimbursement Stipends

Covering your team's cell phone bill is an especially good idea when team members use their personal cell phones:

  • to make work calls
  • to check and respond to email
  • to posts updates in work-specific accounts and apps
  • be accessible via Slack, MS teams, or whatever internal chat system you use

If your team members are expected to work long hours and be accessible during off hours, covering their cell phone is an excellent work perk.

A few of the benefits:

  • This is a nontaxable benefit you can offer your employees
  • When done through an expense software like Concur or a perk management software like Compt, they are scalable benefits, and also 100% IRS compliant.

Setting up an IRS compliant cell phone reimbursement stipend also helps add the needed clarity around what your company covers and how, which makes it all that more likely for your employees to be more mindful about their work-related cell phone usage and expenditure.


Are you ready to set up a cell phone stipend?

Employees who use their cell phones for work would love your help covering those costs. Learn how managing a cell phone stipend through Compt makes life easier for you and for your employees.


Three Examples of Cell Phone Reimbursement Stipends

When setting up a cell phone program, there are two approaches. You can set up a stipend to reimburse your team for cell phone plans, or as we talked about above, you can create a broader program that includes cell phones as well as other categories related to work.

Below are examples highlighting the two unique approaches.

1. Quantopian

They provide one stipend for their team:

  • $600/quarterly to spend on a cell phone bill, or health and wellness

2. Buffer, a fully-remote company.

Buffer offers several work-perk stipends:

  • $200/month for "Working Smarter" stipend for coffee shop working purchases
  • $500/teammate for home office set-up
  • $200/year for tech/office needs
  • Internet reimbursement stipend
  • $850/year continuous learning stipend

To learn more about Buffer's stipend programs, check out this in-depth post.

3. Circle

Circle offers its employees a monthly stipend to use on their cell phones.

There are more examples of companies doing this successfully. If you want to talk through what our most successful customers are doing, we’re happy to help. Click here to talk with a perk stipend expert.


"Cell Phone Reimbursement Stipend" vs. "a "Work-Support Perk Stipend"

When most people think about covering their team member's work-related expenses, many stop at cell phones.

However, in today's world people are not only using their cell phones for work but they're often spending personal money on work-related expenses such as noise-canceling headphones, ergonomic mouses, monitors, wifi/internet bills (especially for those who are remote), software, and more equipment

Many of today's culture-forward companies are going beyond the traditional cell phone reimbursement model and are considering other ways they can support their employees at work through a work equipment stipend

The major benefit of using the equipment model is that you're able to cover the same amount of money for your employees but give them more options and control over what they spend that stipend on. You're giving them the choice of covering their cell phone, but in addition to any other work-preference-related personal expenses.

Below is a graphic highlighting the two programs you can develop with $100/month.

cell phone reimbursement stipend options

Throughout this guide, we'll be discussing both types of stipends.


How to Decide Between BYOD and COPE

First, what do these acronyms stand for?

  • COPE = 'corporate-owned, personally enabled."
  • BYOD = 'bring your own device'

If you're planning to buy the cell phones, the plans, and distribute them to your team, that's COPE. BYOD is your go-to plan if you're reimbursing all or some of your employees' cell phone plan.

To decide between the two, you have to determine what matters most to your company. If security is a big concern or being able to track the location of your employees -- then COPE is likely the right path for you. Be careful though because it's important to realize that with the COPE approach, you're going to manage the cell phone devices, plans, bills and everything else that comes with owning a cell phone (or hundreds of them) which can take a lot of work. 

As the Abacus blog points out, "BYOD is a more scalable, affordable, employee-oriented policy than COPE." Plus, most people don't want to carry around two phones, scoring another point for BYOD and its practicality. 

Read more:


How much money are you spending on perk vendors? Probably too much!

Input some basic data into our Perks Vendor Cost Calculator to identify how much you're spending on all of your vendors and how much you can save by consolidating with Compt (while easily ensuring IRS tax compliance).


Options for Cell Phone Stipends or Perk Allowances:

Process options:

For the longest time a simple reimbursement model was the only option available, but that's not true anymore. Below are some options you have for offering your employees a cell phone reimbursement stipend:

  • Give employees a specific amount every month, reimburse through an expense software such as Concur.
  • Give employees a 'Cell Phone Perk Stipend,' reimbursed through an IRS-friendly perk software (like Compt). This is different from the option above because it highlights the cell phone stipend as a benefit, not as some business expense your employees expect you to cover.
  • Give employees a "Work Equipment Stipend", a "Productivity & Tech Perk Stipend" or a "Remote Work Stipend" where employees can have their cell phones reimbursed as well as hardware like mouses or monitors, software, and anything else that helps them be more successful at their job. If you choose this option, this type of perk stipend would be comprised of some taxable and nontaxable items. 

Software options:

If you're looking to offer these as a business expense, choose a business expense software like Concur or Expensify.

However, if these are part of a perk and lifestyle benefit program that you offer above and beyond salary, then a perk management software like Compt is best.


How to Set Up a Cell Phone stipend:

1. First determine how much you want to offer your team members, within what timeframe.

Most companies offer cell phone stipends on a monthly basis, but you can do quarterly or annual -- whatever is best for your situation and team. Then determine how much.

According to Abacus' How to Create a Cell Phone Reimbursement Policy, they suggest "$50 for low business use and $75 for high business use." 

Also, here's a handy calculator to help you identify how much you should be spending on mobile stipends.

 2. Secondly, select your perk spending categories.

Next decide, if you're doing a cell phone reimbursement spending option only, or if you're creating a larger, more comprehensive program around all-work-related expenses. The latter is considered more akin to a perk program and would include items like hardware, home internet bills (especially great for those who are remote), software, and anything else that helps them to enhance their work abilities and experience.

3. Once you have this information determined, now it’s time to decide how you’ll manage the process.

Your options include:

Managing the process manually

If you choose this option, be prepared to set up a process to track purchases, receipts, balances, approval and paid perks, as well as rejections or ones which need further review.

Consider using Google forms to track submissions, excel or Google sheets to track progress, and be sure to create a process to track the nontaxable vs taxable (for IRS compliance).

Or choose software to help you manage it

Concur and Expensify are two of the most well-known choices for business reimbursements.

However, if you decide however to extend the program to be more than just a cell-phone reimbursement program and include all types of work-related perks, a perk management software like Compt is best.

Compt is 100% IRS compliant, can manage your other perk stipends, and streamlines the entire process which makes you and your finance team's job easier. Plus, with Compt you don't have to pay each expense report like expense software, but rather pay a monthly amount based on the number of team members which can lead to a lower total price.


A perk stipend makes it possible for companies to offer more lifestyle benefits, with less money and ensure that they are personalized to meet the needs of their people.

Below are some of the popular types of stipends:


Learn even more about the benefits of Lifestyle Stipends

Download our free eBook to discover why Lifestyle Spending Accounts are the number one way to support employees.


Are you ready to set up a cell phone stipend?

Employees who use their cell phones for work would love your help covering those costs. Learn how cell phone stipend reimbursement through Compt makes life easier for you and your employees.

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