Also for tax reasons. If they reimburse you $1000 for equipment, you don’t have to pay income tax or any other tax on that $1000 and neither do they.
Not an accountant but I think "reimburse" is the key word there. If it's a spend how you will stipend, that's just like salary I believe.
Yes, there needs to be receipts that you give to your employer.
paying it out as salary is less tax efficient. simply marking it as "equipment stipend" would probably not be enough to prevent it from being counted as income under tax law. if you already have accountants to track business expenses, it's probably more efficient to do whatever the minimum amount of expense tracking is needed to make it a non-taxed expense. plus if you give everyone a budget, there's always the chance that some of them won't spend all of it each year.
Re:Dropbox Converts to Permanent WFH
by Wowfunhappy on Thursday October 15, 2020 @11:16AM
(#24789462)
Ah, that's true, taxes are an angle I didn't think of!
Salary increases are less effective at achieving the goal. If the company thinks a $5k desk and monitor setup will make me most effective, I might think that with a $5k bonus I'd rather spend it on other things. Stipend + stipulations is the best way to go.
Well companies are actually trying to do salary cuts instead.
Although, come to think of it, it might make sense to mark some amount of money as an "equipment stipend" or similar on paychecks. That way, it's clear to both parties what the funds are intended for, even if there's no actual mandate on how to spend them.