If you work from home and bought your own monitor, chair, or upgraded your internet, you might expect your employer to cover it. But only about half of U.S. employers offer any equipment subsidy or reimbursement — 53%, according to the Society for Human Resource Management’s 2026 survey. Whether you’re owed that money depends on a mix of state law, your employer’s policy, and how the payment is structured.
Legal vs Voluntary Reimbursement
State‑by‑State Obligations
Tax‑Smart Claiming
Federal Law: A Narrow Floor
No federal statute says an employer must reimburse your home‑office expenses. The Fair Labor Standards Act (FLSA) steps in only if those costs drop your effective hourly pay below the federal minimum wage of $7.25. For example, if you earn $9.00 an hour and spend $3.00 an hour on required equipment, your effective wage falls to $6.00 — below the minimum — so the employer must reimburse the difference. This protection is narrow; if you earn well above minimum wage, the FLSA gives you no right to reimbursement regardless of what you spend.
States That Require Reimbursement
At least ten states have laws that go further. The strictest is California. Under Labor Code section 2802, employers must indemnify employees for all necessary expenditures incurred as a direct consequence of their duties. Courts interpret “necessary” broadly — in Cochran v. Schwan’s Home Service, the California Court of Appeal held that an employer must reimburse a reasonable percentage of a personal cell‑phone bill even when the employee had an unlimited plan and incurred no extra charge.
Illinois takes a similar approach. The Wage Payment and Collection Act requires reimbursement for necessary expenses that primarily benefit the employer when the employer authorized or required the expense. A written policy can set reasonable caps, but it cannot reduce reimbursement to zero or a de minimis amount.
Other states with broad mandates include Montana, North Dakota, South Dakota, and Washington, D.C. New York and Massachusetts have narrower obligations — New York generally requires reimbursement only if a written policy or agreement promises it; Massachusetts requires it only when unreimbursed costs push pay below the state minimum wage. If you work in a state without a specific law, your employer has no legal duty to reimburse, though they may choose to.
A quick note on jurisdiction: the law that applies is the one where you perform the work, not where the company is headquartered. A Texas resident working remotely for a California company is likely covered by California law.
What Counts as a “Necessary” Expense
In states with strong reimbursement laws, the key question is whether the expense is required for you to do your job, not whether it is common or convenient. Typical items that qualify include:
- A reasonable portion of home internet and cell‑phone service used for work
- Computer hardware (monitor, keyboard, mouse) if your employer doesn’t supply it
- Ergonomic furniture such as an adjustable chair or standing desk, especially when a standard setup would cause strain
- Office supplies (printer ink, paper, pens) needed to perform your duties
- A prorated share of utilities like electricity and heating in some states
The SHRM 2025 Employee Benefits Survey found that among employer‑supported programs, 95% covered office technology, 62% covered general office supplies, 22% covered office chairs, and 35% covered cell‑phone service. These figures show what employers voluntarily offer, not what every state requires.
How Reimbursement Is Taxed: Accountable vs. Non‑Accountable Plans
A flat cash allowance paid without requiring receipts is treated as taxable wages. You’ll pay income tax and FICA (7.65%) on it, and your employer pays the employer side of FICA. That’s a non‑accountable plan. To keep reimbursement tax‑free for you and deductible for the company, the plan must meet IRS accountable‑plan rules.
Under an accountable plan, three conditions apply: the expense has a clear business connection, you substantiate it with receipts or logs within a reasonable time (IRS safe harbor suggests within 60 days), and you return any excess advance within 120 days. Payments that satisfy these rules are not wages — no income tax, Social Security, Medicare, or FUTA. The IRS gives safe‑harbor timing examples (advance within 30 days, substantiation within 60, return within 120), but these are not hard deadlines.
If your employer gives you a fixed monthly “remote stipend” without asking for receipts, that’s a non‑accountable plan. You can ask them to switch: submit a receipt and expense log each month, and have the reimbursement processed separately through payroll as an expense line item. This saves you and the company payroll taxes.
How to Request Reimbursement (or Negotiate a Stipend)
Most employers won’t automatically reimburse you. According to the 2023 Buffer State of Remote Work survey, only 28% of remote workers received employer‑paid internet, and 22% received coworking coverage. Yet 64% of workers who formally requested reimbursement got at least partial payment, with an average approved amount of $1,450 annually, per one industry survey cited in the research.
Here’s a practical approach:
- Track every expense — date, vendor, amount, category, and business purpose. Keep digital copies of receipts.
- Check your state’s law — if you’re in California, Illinois, Montana, or another mandate state, you have a legal right to necessary expenses. Cite the specific statute in your request.
- Frame it as a productivity investment — a proper ergonomic chair and second monitor reduce physical strain and sick days. Use language like “This setup will let me work more efficiently without risking injury.”
- Submit a formal request in writing — email your manager and CC payroll or HR. Attach receipts and an expense log. If your state requires reimbursement within 30 days, note that timeline.
- If refused, escalate — in a mandate state, file a wage claim with the state labor commissioner. For significant amounts, consult an employment attorney.
If your employer doesn’t offer a reimbursement program at all, you can still negotiate. Benchmarks from remote‑first companies include a one‑time home‑office setup budget of $500–$2,000 (average $1,200), a monthly internet and phone allowance of $50–$150 (average $85), and a coworking stipend of $200–$400 per month. Propose a depreciating‑asset model where the company owns the equipment and you use it, or a $500 annual wellness stipend that rolls over.
What to Watch For: Common Pitfalls
- Assuming automatic reimbursements. Most require you to ask in writing with documentation.
- Accepting a non‑accountable plan without realizing the tax hit. Insist on an accountable plan if possible.
- Ignoring small expenses. Printer ink, USB hubs, and software subscriptions add up — often hundreds per year.
- Claiming the home‑office deduction on your taxes as a W‑2 employee. The Tax Cuts and Jobs Act eliminated unreimbursed employee expense deductions for 2018–2025; as of 2026 it has not been reinstated at the federal level. (Some states allow a state deduction — check your state’s rules.)
- Not checking state laws. You could be leaving legally owed money on the table.
The Bottom Line on Your Rights
Whether your employer must reimburse you depends on where you work, not where your company is headquartered. If you’re in a state with a broad mandate, you have a legal right to necessary expenses — and you can enforce it. If you’re not, the decision is voluntary, but the data show that a formal request often succeeds. Either way, understanding the difference between an accountable and non‑accountable plan can save you hundreds in taxes each year.