Who’s Stuck With The Bill?

• The rise in working remotely comes with several costs, which include internet subscriptions, computers and office equipment, home office furniture, security, insurance, and software.
• There are various models that companies are using to cover these costs of working remotely.
• It may be up to the employer to decide on what benefits they offer (subject to local rules and laws).

Remote work and hybrid employment is becoming the norm — with increasing numbers of people and employers expected to go remote in future. But this rise in working from home/working remotely comes with several costs. Those costs include internet subscriptions, computers and office equipment, home office furniture, security, insurance, and software.

There are various models that companies are using to cover these costs of working remotely. In some instances, the onus is on the remote worker to cover the costs. Other times companies will reimburse some costs associated with a home office. And more frequently, employees are provided with an annual stipend to cover their remote work costs. 

Often, the amount paid towards remote work expenses depends on whether the job is full time or freelance, and the seniority of the employee’s position. There are also some countries and cities that are legislating reimbursements for remote work costs and putting the onus on employers to ensure health and safety for remote workers.

Below we take a deeper look at what expenses are incurred when working remotely, what cost savings can be achieved by working from home, and the types of expenses and remote work benefits that employers are contributing towards their staff. 

What are the costs associated with working remotely?

It’s often not until you start working from home that you start to discover the mounting range of costs associated with your new-found flexible working style. 

This can include the cost of a dedicated work laptop, printer, phone and internet. You’ll also most likely need some office stationary like files, paper, pens and staplers. And then you will probably need some office furniture, which can be expensive, especially if you want to ensure proper ergonomics when it comes to your perfect workstation. 

Some people either don’t have the space for a home office, or they prefer to work in a more social environment at a coworking space or cafe. That involves monthly fees, which can also mount up. 

In addition, you will likely need specialised software that requires regular updates, antivirus software, and perhaps a VPN if you’re wanting to ensure maximum safety. You may need to pay for a security alarm to protect your office, as well as security features like a sturdy door, locks or burglar bars on windows. If you have valuable items in your home such as a work laptop, then you will also need to make sure it’s insured. 

Then there are other more peripheral costs associated with working remotely that also need to be considered; you may need to take out your own medical insurance cover for remote workers if you’re not on your employers’ plan. You may need to make your own pension or retirement contributions from your salary if your employer is not contributing towards that. 

Many employers offer life insurance plans and other policies that pay out if you’re incapacitated or injured and no longer able to work. If you’re working remotely, and particularly if you’re freelancing, then you may need to cover those costs yourself. 

What are some of the cost savings from working remotely?

While there are many expenses that you may need to pay for when working from home, there are also many cost savings of doing so — not to mention the flexibility and work-life balance benefits of remote work. 

For many remote workers, one of the biggest benefits is the fact that you no longer have to commute long distances to get to work. This saves a lot of time each day, particularly in large cities where you may be commuting over an hour each way. This can translate into huge cost savings on your monthly train, bus, or car transport costs. 

You can also save money on clothes if you don’t need to have such a large corporate wardrobe for your daily office appearances. For some, this can translate into a significant saving. 

Another big savings is that you’re probably more able to eat breakfast, lunch and dinner at home, which means you can skip the expensive work lunches, after work social events and daily coffee or snacks purchases. 

It’s not just employees who save money working from home; employers can also save considerable amounts of money by not having to rent office space (or renting a smaller space for fewer on-site employees). If employers no longer have to provide staff with laptops, stationery and office equipment and don’t need to spend on office furniture and decor — they can save even more. Plus, if the team is fully remote, employers may be able to avoid paying property insurance costs, or heating/cooling bills. 

When do employers cover the costs of working remotely?

It’s evident that both employers and employees can save significant amounts working remotely, and it’s also clear that there are still various costs associated with remote work as outlined above. So when should employers cover the costs of working remotely, and when should employees be expected to pay? 

The answer is not simple, and there’s no hard and fast rule. In essence, it may be up to the employer to decide on what benefits they offer (subject, of course, to local regulations). 

While it may be tempting to save costs and not offer many remote work benefits, many employers are realizing that there’s merit in being generous — it makes the company more competitive to attract top talent. 

In general, the trend seems to be that if you’re freelancing, then you’ll most likely pay for many of the costs of working remotely yourself. However, some employers may provide a work-from-home stipend and will cover costs associated with online software that you may need to perform your job. In most jurisdictions, freelancers will be able to claim many costs associated with working remotely as tax deductible expenses. 

When it comes to full time employees who work remotely, there are a range of benefits that companies can offer. That includes reimbursing employees for specified office equipment and other related expenses, or giving them a stipend to cover those remote work costs. 

Some employers also adjust staff salaries, depending where in the world they live and the costs of living there. In some cases remote staff are paid less than office-based staff, as companies acknowledge the costs of travelling to work. This may also vary depending on the seniority of your role within the company. 

This is part of the reason why many companies have started to create remote work policies so that they can deal equitably and transparently with issues affecting remote staff. 

What is a remote work stipend and what does it cover? 

Having to reimburse employees for their work-related expenses can become administratively cumbersome. That’s why some companies instead are opting to provide remote work stipends, which ensures that all staff in similar roles receive the same amount.

The remote work stipend can cover expenses like buying office furniture, equipment, and software, or paying for internet. The amount of the work-from-home stipend will vary depending on the budget of the company, and may not be wholly sufficient to cover all remote office costs. 

These are the laws that cover remote work compensation

In different parts of the world, cities and countries have started creating laws and regulations that apply to remote work. For example, in California their telecommuting law requires employers to reimburse staff for their work equipment and other expenses, such as internet and laptops. In addition, employers also need to make sure that their remote staff work in safe and healthy environments. 

What are some of the most affordable cities to live in when working remotely? 

Given the rapid rise in remote work around the world, many people have decided to change their address and work from some of the trendiest remote work hubs on the planet. Others have decided to move away from expensive cities to smaller towns that offer a lower cost of living, and others have decided to dig up their roots and become digital nomads.

Some of the most attractive cities to work from, based on affordability, livability and business infrastructure, are seeing an influx of remote workers and nomads. These include places like Thailand, Vietnam, Portugal, Malaysia, Indonesia, Mexico, Morocco and Ecuador. 

If you’re considering a remote job, no matter the location, it’s worth asking to see the company’s remote work policy, and to find out more about the benefits they offer remote staff.