Why You Need a Cell Phone Reimbursement Policy + Template

Why You Need a Cell Phone Reimbursement Policy + Template

With so much of the global workforce now working from home, many companies are creating cell phone reimbursement policies for the first time ever. At organizations that went remote during the pandemic, employees are using personal phones for work to adjust to this shift. And businesses that have formed since then are deciding between issuing company-owned phones or requiring staff to use their own devices and reimbursing them for work-related usage. 

Many employees also prefer using their personal mobile devices for work rather than having two mobiles. 

A cell phone reimbursement policy explains how your company pays employees back for the costs they incur when they use personal phones for work. A comprehensive policy outlines what type of phone use is eligible for reimbursement, how phone use is reimbursed, expectations for phone usage and availability, and more.

Keep reading to learn why you need a cell phone reimbursement policy, what it should cover, how to calculate cell phone reimbursement rates, and whether reimbursements count as income. You’ll also find our sample cell phone reimbursement policy template, so you don’t have to put off introducing your company’s policy any longer.

Why do I need a cell phone reimbursement policy?

A cell phone reimbursement is no longer a perk; it’s essential to running a modern business. Here’s why your company needs a cell phone reimbursement policy.

Increased use of mobile devices in the workplace

Cell phones are becoming increasingly common in the workplace for two reasons.

First, businesses and their employees increasingly rely on mobile apps to simplify work. Teammates are staying in touch after hours, out of the office, and on-the-go via email apps and Slack. Employees who travel for work use apps to track mileage and save expense receipts. A study by Samsung and Frost & Sullivan found that one in two employees uses work-related apps such as these on their mobile devices.

Second, employees that once relied on office phones for work no longer have access to their landlines since many companies are working remotely due to the pandemic. For example, sales executives who spend all day calling potential customers now have to use their personal cell phones to complete these calls.

The popularity of cell phone reimbursement policies confirms the omnipresence of mobile devices in the workplace. Another Samsung study found that in 2016, 75% of firms provided stipends to employees using personal phones for work. In 2018, that figure rose to 89%. If that study were redone today, that number would be higher still due to the prevalence of remote work.

Legal requirements 

In some states, it is illegal for employees to take on their company’s operating expenses. Therefore, if your company operates in one of the following states, you don’t have a choice in whether or not you should reimburse staff for the costs associated with work-related cell phone use:

  • District of Columbia
  • California
  • Illinois
  • Iowa
  • Massachusetts
  • Minnesota
  • Montana
  • New Hampshire
  • New York
  • Pennsylvania

These states require businesses to reimburse staff for business expenses they pay for out of pocket.

Employee productivity and satisfaction 

Even if you’re not legally required to cover your employees’ work-related cell phone costs, doing so can increase productivity and satisfaction, helping your company boost performance and reduce costly staff turnover.  

Thanks to work-related mobile apps, employees no longer have to be on their computers to work. They can respond to emails, reach out to a team member via Slack, or even take a video call while working from home or out and about. The Samsung and Frost & Sullivan study found that because they make it easier to work anytime, anywhere, cell phones enable employees to work an additional 58 minutes each day. That translates into a 34% increase in productivity.

When you reimburse employees for the personal cell phones they inevitably – or by mandate – use for work, you’re offering them a valuable benefit that boosts workplace satisfaction. Glassdoor’s Employment Confidence Survey found that 60% of professionals say benefits play a major role in whether or not they accept a job offer. Moreover, four in five employees prefer additional benefits to increased pay. If you’re one of the one in 10 companies that doesn’t provide a cell phone reimbursement or stipend, you could be at a competitive disadvantage when it comes to recruiting and retaining talent.

What should I include in a cell phone reimbursement policy?

Now that you understand why offering a mobile device stipend is important, you’re ready to draft your own reimbursement policy. Here’s exactly how to do that.

  1. Outline employee expectations clearly. Explain:
  • What activities count as business use of their phones. If these tasks can be done on a desktop or laptop, can employees be reimbursed for doing them on their phones? 
  • Who can be reimbursed for mobile device use. You may consider restricting cell phone reimbursements to certain job functions or seniority levels. Does an employee have to travel a lot for their cell phone use to qualify as a business expense? Does making phone calls have to be a primary part of their job description? 
  • How you expect employees to protect sensitive company data on their phones. Do they have to password-protect their devices? Are they required to enable double authentication for work-related apps? 
  1. Establish how employee use will be monitored. How will you respect employees’ privacy? Include a privacy policy and explain repercussions for unacceptable usage. 
  2. Explain how much will be reimbursed. Will you cover the device and the cell phone bill, or just a portion of the phone bill? If it’s a percentage, outline how your reimbursement rate will be calculated. Because establishing a reimbursement structure is so important, we’ll elaborate further in the next section.  

How should I determine cell phone reimbursement rates?

There are several ways to structure cell phone reimbursement rates for work-related mobile device use. 

Option 1: Pay for the whole cell phone bill. This option works well for phone-dependent roles, like sales positions, employees who travel to clients frequently, and customer support roles. While covering the whole bill will cost you more, this structure will save your team admin time thanks to simple calculations. You could decide to pay for the phone cost and the carrier plan, or just the plan portion of the bill. 

Option 2: Reimburse value of work calls. In this structure, employees submit a record of calls and highlight work-related usage for which they want to be reimbursed.

Option 3: Pay a fixed percentage of the cell phone bill. This rate is simple to calculate month over month and takes contract fees, carrier fees, maintenance, and device costs and upgrades into consideration. 

As you can see, each structure has its own pros and cons. Your cell phone reimbursement policy can include variations of all three options for different roles or circumstances, or you can apply one cell phone reimbursement rate structure to the entire company. 

Consider the following factors when deciding how to structure your cell phone reimbursement rate policy:

  • The nature of work at your company and in each role 
  • How mobile-centric communication is at the company
  • Whether or not employees need to be contactable by colleagues at all times
  • How much out-of-office work is required

Are cell phone reimbursements treated as income?

According to the IRS, the taxability of cell phone reimbursements depends on their purpose.

A mobile device reimbursement does not count as taxable income if the phone is used for “non-compensatory business purposes” like contacting employees when they’re away from the office or requiring employees to be available to clients over the phone when they’re out of the office.

A mobile device reimbursement counts as taxable income if it isn’t used for non-compensatory business purposes and is instead used as an employee incentive. So, for example, if you try to attract new employees whose roles don’t require them to be available over the phone with a free cell phone, then the value of that phone and its company-provided phone plan are treated as taxable income. 

Here at Lola.com we know a thing or two about helping your company control spend, but we’re not certified tax professionals. Please reach out to a tax professional for personalized advice.

The bottom line: Create a cell phone reimbursement policy or get left behind

Most companies expect their employers to use their personal cell phones for work, whether to stay connected with teammates or track mileage for business travel. And employees are increasingly expecting their employers to cover these work-related phone costs. Use our sample cell phone reimbursement policy template to create a plan that compensates your staff fairly.

Cell phone reimbursement policy template

This example template is a guide for companies looking to implement a cell phone reimbursement policy. We encourage you to edit and build on this document to meet your company’s individual needs, and undertake your own legal review as required. Lola.com is not responsible for any issues arising from the use of this template.

1.0 Introduction

This BYOD policy lays out the requirements for all [Company] (“we”, “us”, “our”) users wishing to use personal mobile devices to access our networks and confidential information or information systems.

This policy refers to mobile devices owned by the end user, that are used to access our networks and internal information systems, including cloud-based services.

This policy applies to all BYOD mobile device users regardless of employment structure (full-time, part-time, or contract).

1.1 Eligibility Criteria

The following staff members are eligible to become BYOD mobile device users:

  • [List any criteria here]

Note that BYOD is a privilege and this may be revoked at any time and without notice. In the case of suspected misuse, we have the right to seize and search any personal mobile device enrolled in the BYOD program as part of internal investigations.

As part of this policy, our IT staff may lock BYOD user devices so that they cannot be used, and may erase data or content on BYOD user devices. These actions can even occur accidentally.

1.2 Supported Devices & Carriers

Only the following devices may be enrolled in our BYOD program:

- [Vendor] [Model] running [Operating Software] [Version] or newer. All BYOD devices are eligible/must use our negotiated cellular carrier [insert carrier details].

Users may enroll a supported device in the our BYOD program by [insert process here].

[Company] will/will not provide support for BYOD devices. Technical support can be accessed by calling [phone number].


BYOD users are responsible for identifying their own cellular voice/data carrier and signing up directly with the carrier.

2.0 Employee Expectations

2.1 Acceptable Use

Our Acceptable Use Policy applies to all BYOD devices and BYOD users. Where technically possible, we may enforce acceptable use through various technologies within the network and installed on BYOD end-user devices, including:

  1. URL filtering (blocking of access to particular classes of web sites, including pornography, as well as sites which including criminal acts, gambling, hacking, hate speech, violence, or weapons)
  2. Anti-Malware (blocking of viruses and other malicious software)
  3. Attachment blocking (blocking of certain types of email traffic, even if there is no specific threat, such as emailing of executable programs)
  4. Intrusion prevention (blocking of traffic that appears to be malicious)
  5. Traffic management (blocking or slowing traffic that is in violation of policy, such as peer-to-peer file sharing)

These requirements apply to personally-owned BYOD devices, even when used for non-work purposes.

All of these technologies include logging of IP address and, in some cases, personal identification. These logs are regularly reviewed by our IT group and may be made available to internal auditors and HR departments.

2.2 Data Protection

Our Data Protection Policy applies to all BYOD devices and BYOD users. [Insert reference to Data Protection policy on intranet if applicable]. BYOD users are responsible for protecting company confidential information according to this policy. In addition, the following types of confidential information are not permitted on BYOD devices:

  • [List restricted data here]

Users are also reminded that confidential information always remains the property of [Company] and we reserve the right to modify access, revoke encrypted access, or delete confidential information from BYOD devices at any time.

2.3 Loss of Device

When a BYOD-enrolled device is lost, suspected lost, or accessed without authorization, the BYOD user must:

  • [Insert process here]

BYOD users are reminded that this may cause them to permanently lose any personal data stored on the BYOD device, and that it is their responsibility to make backups of any valuable personal data.

2.4 Employee Termination

When a BYOD employee leaves [Company]'s employment, our Help Desk will immediately:

  • [Insert process here]

3.0 Privacy & Information Security

3.1 Privacy & Data Loss 

Privacy and security of personal data

  • Outline relevant backup processes, where data will be backed up, what type of data will be backed up, who has access to data, e.g. HR or auditors.

Private usage data

  • Outline whether devices enrolled in the BYOD program report back usage such as location data, URL history, etc.

Data loss

  • Outline whether IT has the ability to trigger a remote wipe and lock of the device.

4. Reimbursement of Costs

4.1 Cost of the device

Costs of all BYOD devices, including upgrades and replacement in case of theft, are the responsibility of the employee.

4.2 Cost of the carrier service

Costs for voice/data service on BYOD devices for users working from any [Company] office will be reimbursed up to [$50]/month per user (not per device) by the company.

BYOD device users who telecommute or spend more than [75]% of their time out of the office will be reimbursed up to $[100]/month per user for voice/data services by the company with approval of their immediate supervisor."

4.3 Costs when on official travel

Costs for voice/data roaming or hotspot wireless service up to [$25]/day will be reimbursed for staff members on official travel.

4.4 Cost of replacing or upgrading the device

Employees are responsible for the cost of replacing BYOD devices that are lost or stolen, or when devices are upgraded.

Agreement and Violation Consequences 

This BYOD Policy describes a set of responsibilities and agreements between participating staff members and [Company]. Violations of the BYOD policy, or other related policies (including Acceptable Use and Data Classification) may result in the blocking of access, dis-enrollment from the BYOD program, or other administrative actions. Severe or continued violations are grounds for disciplinary actions or dismissal. 


________________                                                                ________________

Employee                                                                              Manager

Date:                                                                                       Date:

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About the Author: Ana Cvetkovic
Ana Cvetkovic is a freelance writer for Lola.com. She is also the CEO of BLOOM Digital Marketing, a creative marketing agency that specializes in creating demand generation content for SaaS companies in the hospitality and travel industries.