Work From Home Allowance

What is a work from home allowance?

A work from home allowance (also known as WFA) is an allowance given to employees by a company which covers the costs associated with remote working.

During the pandemic, many companies opted for remote working as a way to keep employees safe and healthy. This trend has stuck around, with many companies now offering a hybrid work model. This new way of working has given employees a greater sense of work-life balance and flexibility, but working from home comes with its own set of costs. 

When working from home, you’ll likely need to buy office equipment such as a desk & chair, a monitor, laptop stand, and even upgrade your internet connection. This can be quite expensive for employees who wouldn’t have previously had to purchase these items pre-pandemic. 

So, offering employees a generous work from home allowance is a great way to support your team with the cost of working from home and help them feel valued and appreciated.

What is the average WFH allowance? 

Work from home allowances vary from company to company, and from country to country. 

In the UK, it is common for a WFH allowance to be added to your monthly pay — with the average amount being around £26 per month. The idea behind the monthly allowance is that it covers ongoing costs associated with working from home, such as electricity, wifi, and relevant additional household costs.

Other companies offer a one-off allowance for employees who choose to work from home which covers the cost of home office equipment, such as a desk, chair & monitor. Whereas others might offer a one-off payment as well as an ongoing allowance. The average one-off WFH allowance in the UK is £500-£1000.

Benefits of a work from home allowances

Work from home allowances are a great benefit to offer. There are advantages to both employees and companies for providing a WFH allowance, e.g.

For employees: 

  • Reduced commuting — saves time and is more environmentally friendly as travel is reduced
  • Incentive to work from home more 
  • Not left out of pocket for work-related expenses

For employers:

  • Attract talent — stay competitive with other companies who are already offering this benefit
  • Retain talent — 4 in 5 employees plan to leave their job in the next 12 months because they want better benefits
  • Reduce absenteeism 
  • Improve productivity
  • Cost-effective employee benefit — companies can save on the costs of office space 

What does a WFH allowance cover?

A work from home allowance can be used for a variety of different costs. Employers can set specific guidelines for how it can be used by employees. 

Here’s what it might be used for: 

  • Desk
  • Chair 
  • Monitor
  • Laptop stand 
  • Electricity bills 
  • Wifi costs 
  • Extras e.g., a plant or lamp 

Who’s eligible for a work from home allowance? 

A WFH allowance is usually given to all employees who are able to work from home as part of their employment contract. If the allowance takes the form of a one-off allowance (which can be offered through the Ben platform as a flexible allowance ;) learn more here), then employees are usually given this before their official start date. 

Whereas if it’s an ongoing allowance, employees might receive it after they’ve onboarded or passed the probation period. 

What should employers consider when offering WFA?

If you’re thinking of offering a work from home allowance, you should consider the following: 

  • The allowance amount 
  • Who’s eligible 
  • When you’re going to give employees the allowance 
  • How often you’re going to offer the allowance 
  • The tax implications of offering an allowance e.g., payroll deductions 

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