How to Calculate Cell Phone Reimbursement for Employees

08.24.17Baylee Olsen

California Labor Code Section 2802 imposes broad obligations on employers to cover their employees’ business expenses, which could include at least part of the costs of a wireless voice and data plan if the employee is permitted or required to use a personal device for work.

Generally, it is not necessary to pay for the full cost of employees’ cell phone plans, but a portion is appropriate in an organization’s cell phone reimbursement policy. You may also choose to have two tiers; one for heavy usage and one for light.

Here’s an example of a two-tier reimbursement:

Depending on employee job responsibilities, the type of reimbursement authorized per month will vary.

Low need:

A manager determines an employee’s job responsibilities require secure company communication on an employee’s personal mobile device, so they agree to use WhatsApp. The app is on the employee’s personal iPhone with limited accessibility for work outside of the app.

According to the standard monthly cell phone allowance amount, this employee will be given $20.00 per month. The approved allowance will be paid biweekly through payroll reimbursement.

High need:

Department Head determines an employee’s job responsibilities require secure email client application on an employee’s personal mobile device and meets one of the following three criteria:

  1. More than 25% of such employee’s work is conducted outside of the facility
  2. The employee is required to be contacted via phone call on a regular basis; or
  3. The employee is a critical decision maker.

In this case, an allowance of $75.00 per month will be paid to the employee. The approved cell phone allowance will be paid monthly through an expense report. Expense reports must be submitted within 90 days.

A cell phone reimbursement policy and reimbursement form can accompany new hire paperwork. The hiring manager would complete the form to determine the expected usage and submit to accounting to establish the monthly credit.