3 Employee Benefits That Might Offset the Costs of Returning To Offices

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Many employers who switched to remote work during COVID-19 are calling employees back into the office, at least a few days each week. GOBankingRates surveyed 1,028 Americans about their finances in mid-November, and less than 19% were working from home, 40% were working outside of the home and 12% worked in a hybrid system.

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But after having a taste of remote work, a lot of employees want to continue to work from home: 50% of the people surveyed said their preferred working situation for 2023 is to work remotely, 37% said they wanted to work outside the home and 13% preferred a hybrid system.

Perhaps the desire to work remotely has something to do with the extra costs that come with working in an office. Commuting expenses can have a significant impact on your wallet with today’s high gas prices, and you can also expect to pay more for food, work clothes and extra child care and pet care costs when you’re away from home for the day. A tight labor market is forcing employers to address some of these issues as they require more employees to return to the office.

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“During the pandemic, 50% of workers were able to work from home and employers have been grappling with what is the right approach for employees going forward. The results are mixed by geography, culture, industry and other demographics,” said Regina Ihrke, senior director, Willis Towers Watson, an employee benefits consulting firm. “Employers are still struggling with a talent challenge in both retention and acquisition – and they are struggling with striking the right balance of the employee voice of wanting flexibility, creating a connected and collaborative culture, and sometimes pure sunk cost of real estate.”

Her firm has been working with a variety of employers to expand benefits that can help offset some of the extra expenses and make returning to the office more palatable for employees. Adding benefits and flexibility is timely as quite a few employees are considering making a change — 19% of the survey respondents said they plan to pursue a new full-time job or different career in 2023 and 14% plan to find a new side gig or part-time work.

“The number one employee priority according to the WTW 2022 Global Benefits Attitude Survey is flexibility – which has a variety of definitions from where, when and how people work to flexibility of total rewards choices,” Ihrke said. “The span of benefits and perks being offered to incentivize those to return to the office are broad.”

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Employee Benefits To Offset Return-to-Office Expenses

You may qualify for some of these employee benefits and tax breaks to help offset some of the expenses of returning to the office.

Commuter Benefits

If your employer offers a pretax commuter benefit program, you may be able to set aside up to $300 per month that you can use tax-free for parking benefits in 2023 (up from $280 in 2022) and up to $300 per month for transit benefits that you can use for the subway, bus, train or other public transportation.

Some employers are also offering additional commuter benefits, such as a public transportation stipend or transit passes, parking access and stipend, and bike facilities, Ihrke said.

Child Care Benefits

Returning to the office means longer days away from home while commuting — and more complicated caregiving responsibilities. If your employer offers a dependent care flexible spending account, you can set aside up to $5,000 pretax (for singles or married couples filing jointly; $2,500 for married filing separately) in 2023 that you can use tax-free for child care costs, such as day care, a babysitter, before-school and after-school care, and even day camp in the summer for children under age 13.

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If you don’t have access to a dependent care FSA, see if you can qualify for the child and dependent care tax credit, which can reduce your tax liability by up to $1,050 for one child or $2,100 for two children in 2022, depending on your income and child care expenses (reduced from higher limits that were only available in 2021).

Some employers are also offering other benefits to help provide access to affordable and reliable child care, elder care and pet care — such as backup child care, caregiving concierge support and a caregiving financial stipend, Ihrke said.

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Health Benefits

Most employers continue to help subsidize health insurance costs for their employees, but they’re also looking for ways to make going to the doctor and staying healthy more convenient after people return to the office.

Some employers are providing mobile screenings (e.g., mammography, flu shot, dentistry), well-being coaching, onsite or near-site health centers, onsite employee assistance program counseling, virtual care and nutrition counseling, Ihrke said.

Employers also recognize that employees have less time to prepare meals for their families and accomplish household tasks when they return to the office and spend time commuting, so they’re also considering offering perks such as healthy meals, meal prep services and cleaning services, she said.

Home Office Breaks for the Self-Employed

Instead of returning to their employer’s office, some people are quitting and starting their own businesses.

One of the biggest benefits of being self-employed is that you can control where you work: You can live and work anywhere, and you may be able to stretch your income much further by moving to a less-expensive area. Currently, 10% of the survey respondents work as a freelancer/contractor and 5% have a side gig or multiple side gigs — and 13% said they plan to find a new side gig or part-time work in 2023.

If you become self-employed, you may have less job stability and you may lose some valuable employee benefits, such as employer-subsidized health insurance, a 401(k) match, vacation and sick days, and other perks. But you can take some additional tax breaks, such as deducting your business expenses and making tax-deductible contributions to a self-employed retirement account, such as a solo 401(k) or a simplified employee pension (SEP).

You may also qualify for the home office tax deduction. The tax laws changed for 2018 through 2025 to make the home office deduction available only to self-employed people. Employees can no longer qualify for the break even if they do all their work remotely. You may be able to take the break if you’re self-employed full-time or even if you are doing some freelance work from home on the side.

To qualify for the break, you must use your home office regularly and exclusively for business. It doesn’t need to be a separate room, but it can’t be a space where you do anything else — it can be a corner in your basement, for example, but not the dining room table where your family also eats. It must also be your principal place of business or where you meet regularly with clients and patients, even if you occasionally do some work elsewhere.

You can either deduct a portion of your mortgage interest or rent, utilities, home insurance and other expenses based on the percentage of your home that your home office takes up — such as 10% of those expenses if your home office is 10% of your home’s square footage. Or you can use the simplified method, which lets you deduct $5 per square foot for your office, up to 300 square feet, with a maximum deduction of $1,500. If you do self-employed work from the home office for just a portion of the year, your deduction is prorated based on the number of months you qualified, said Morris Armstrong, an enrolled agent in Cheshire, Connecticut.

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Methodology: GOBankingRates surveyed 1,028 Americans aged 18 and older from across the country between November 14 and November 18, 2022, asking twenty different questions: (1) What best describes the impact of Biden’s student loan forgiveness plan on you?; (2) How do you think student loan forgiveness will affect the economy in 2023?; (3) Describe your working situation in 2022; (4) Which best describes your working situation?; (5) What do you prefer your working situation to be in 2023?; (6) Did you look for better value in your job in 2022?; (7) Are you planning for any major job changes in 2023?; (8) Which of the following economic factors impacted your finances the most in 2022?; (9) What would you like to have happen the most in 2023?; (10) Are you in favor of more stimulus or inflation relief checks in 2023?; (11) If you had a major financial emergency in 2022, how did you pay for it?; (12) How did your stocks fare in the bear market of 2022?; (13) Did you put off a big purchase in 2022 due to the strained economy?; (14) What best describes the impact the Fed raising interest rates has had on you?; (15) Which best describes your top financial goal for 2023?; (16) Are you planning for any of these major milestones in 2023? (select all that apply); (17) What is your top financial stressor heading into the new year?; (18) If you are a small business owner, what has been your biggest financial challenge in 2022?; (19) How do you feel about the Social Security cost-of-living adjustment (COLA) of 8.7% for 2023?; and (20) How did social media most impact your finances in 2022?. GOBankingRates used PureSpectrum’s survey platform to conduct the poll.

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About the Author

Kimberly Lankford has been a financial journalist for more than 20 years. As the “Ask Kim” columnist at Kiplinger’s Personal Finance Magazine, she received hundreds of reader questions every month about insurance, taxes, retirement planning and other personal finance issues. Her financial articles have also appeared in the Washington Post, U.S. News & World Report, AARP Magazine, Boston Globe, PBS Next Avenue, Bloomberg Wealth Manager and Military Officer Magazine, and her syndicated columns were published regularly in the Chicago Tribune, Denver Post, Baltimore Sun and other papers.
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