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.

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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. 

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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. 

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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.

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What is the average WFH allowance? 

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

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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.

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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.

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Benefits of a work from home allowances

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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.

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For employees: 

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• 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

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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 

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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. 

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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. 

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

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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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