Gym Reimbursement Program: What It Is and How It Works In 2025

Employees want to keep fit and healthy. And it’s in employers’ best interests to want the same—after all, healthier employees are often happier, more productive, and less likely to burn out. The challenge for both parties is that staying fit in 2025 isn’t cheap.

According to the latest industry data, the average fitness facility charges $65 per month in the U.S., and premium gyms in cities like San Francisco or New York often cost more than double that. Add in boutique fitness classes, yoga memberships, or personal training sessions, and the financial burden can quickly put wellness out of reach for many employees.

But when employers support their workers by covering these expenses, they signal that employee well-being is a business priority. This article discusses gym reimbursement programs as one way to support these costs. We’ll explore how they work, their benefits and how gym reimbursement programs compare to funding health and fitness benefits upfront.

What is a gym reimbursement program?

A gym reimbursement program is a benefit offered by employers who agree to cover all or part of the costs that employees spend on fitness and wellness activities. Instead of paying for the entire cost of the gym membership or class fees by themselves, employees submit a claim and receive reimbursement for certain eligible expenses. 

Typically, employers set a maximum reimbursement limit, for example, $50, $100, or even $200 per month, and employees use this toward a variety of fitness options. Some businesses zoom in on offering gym and fitness center memberships, while others take a broader view of wellness by offering to reimburse:

• Personal trainer sessions
• Yoga, pilates, and spin classes
• Home workout equipment purchases (like free weights or a yoga mat)
• Spa or massage therapy for recovery
• The cost of joining sports leagues or run clubs

At first glance, gym reimbursement programs sound generous enough, but in practice, this model can create serious affordability barriers. Not everyone has the extra cash to front those costs, especially in high-cost cities where fitness expenses are steep. Employees shouldn’t have to use a credit card and go temporarily into debt so they can stay physically healthy. Or feel the strain of worrying how they’ll make rent because their reimbursement is late. 

That’s why many companies are turning to more inclusive approaches, like upfront funding with Benepass, where employees access their benefits immediately without having to wait to get their money back.

Gym reimbursement vs. subsidy vs. stipend: How does each approach compare?

While “gym reimbursement program” is a term many workers recognize, employers today have a few different ways to support employee wellness. The three most common approaches are reimbursement, subsidies, and stipends, each with a distinct funding process. 

Reimbursements

• With reimbursements, employees pay their gym fees or fitness expenses out of their own pocket.
• They submit receipts or claims, and the company reimburses them up to a set limit.
• Reimbursements can create friction as not every employee has the extra cash to front large expenses, and the claims process can be time-consuming.

Subsidies

• Subsidies are employer-funded plans that pay for part or all of a gym membership upfront.
• Employees often use a fitness benefits platform to pay directly for their membership or classes.
• Employers can structure subsidies as one-time payments (e.g., an annual membership fee) or on a recurring basis (monthly or quarterly).
• As employees don’t have to wait for reimbursement, this model tends to be more inclusive and easier to use.

Stipends

• Stipends are a flexible allowance employees can spend on eligible wellness or fitness expenses.
• Instead of being tied to a single gym, wellness stipends can cover a wide range of activities, from yoga classes to sports leagues to home equipment.
• When delivered through a platform like Benepass, stipends combine the upfront funding of a subsidy with the flexibility employees want.

The key distinction between each funding model is whether employees are asked to pay first and get reimbursed later, or whether the benefit is funded upfront. Companies that shift away from reimbursement models usually see higher participation and engagement, because removing barriers makes fitness more accessible for everyone.

Why offer a gym reimbursement plan?

When companies offer gym reimbursement plans, their heart is often in the right place — they want to support their workers’ health and fitness goals, and that’s a good thing. While the reimbursement model itself is problematic, there are many benefits to an investment in offering lifestyle benefits that support employee health and fitness. These include: 

Improving employee well-being 

When companies help cover the cost of fitness, they’re in line with the current trend toward wellness. In particular, a McKinsey survey found that 58% of people prioritize wellness now compared to a year prior and employees increasingly expect their workplace to reflect that same priority.

Along with improving health markers, physical activity also has a ripple effect on mental health. In particular, employees who focus on their fitness tend to report lower stress levels, better mood, and a stronger sense of balance. 

Boosting productivity

Regular exercise is also an excellent way to boost your workers’ performance, not by working them into the ground, but by supporting them in mind, body, and spirit. Movement improves energy levels, sharpens focus, and reduces stress, all of which translate into stronger workplace performance.

According to Wellhub’s State of Work-Life Wellness report, 90% of employees say their physical fitness directly impacts their productivity. The TELUS Health Mental Health Index backs this up, showing that physically active employees lose 14 fewer workdays of productivity each year compared to their less active peers. On the flip side, workers dissatisfied with their physical health scored 25 points lower on mental health measures and lost an additional 21 days of productivity.

Reducing health insurance costs

Healthcare costs are spiking, and employers feel the squeeze. According to Mercer’s 2025 National Survey of Employer-Sponsored Health Plans, the average health benefit cost per employee is projected to rise by 6.5% in 2026, a spike not seen since 2010, even after most employers plan cost-reduction measures. Organizations that don’t make any changes, can expect to add 9% to their plan cost. 

While it can seem counterintuitive to outlay more spend on benefits, research from the U.S. Centers for Disease Control and Prevention finds that fitness perks can lead to significant savings on healthcare costs, since employees are generally healthier. The CDC recommends a three-pronged approach: 

• Coordinated approach: A planned and well-organized set of programs, policies, benefits, and environmental supports crafted to meet the health and safety needs of all employees.
• Systematic approach: A structured effort making sure workplace health programs are consistent, tailored to your organization, and adaptable over time.
• Comprehensive approach: A holistic strategy that addresses multiple health risks and conditions simultaneously, benefiting individuals and the company as a whole.

Building a stronger company culture

Encouraging employees to focus on their health strengthens the culture of the entire workplace. When benefits are delivered through upfront, flexible funding, as opposed to cumbersome reimbursements, this ease of use drives stronger participation. Mindbody’s partnership with Benepass is a great example of this, boasting 89% of employees engaged with its successful program. The result is a healthier, more connected culture where employees feel supported and valued.

Attracting and retaining top talent 

Wellness benefits are also a powerful tool for attracting and retaining talent. A whopping 81.6% of employees say that benefits are a top factor in deciding whether to stay with an employer. It follows that companies investing in meaningful, easy-to-use wellness benefits are also better positioned to stand out to job seekers.

What are the drawbacks of offering gym reimbursement?

While gym reimbursement programs can be a positive step toward supporting employee wellness, they aren’t without challenges. Before investing, employers should weigh a few key considerations:

• Financial drawbacks: Budgets vary widely, and not every company can commit the same level of resources. It’s important to determine how much you can reasonably allocate to employee health without overextending your benefits spend.
• Inclusion drawbacks: A standard gym reimbursement may not work for everyone. Employees with disabilities, mobility impairments, or limited access to gyms in their area could be excluded if programs aren’t designed with flexibility in mind.
• Tax implications: The IRS generally considers reimbursements for gym or fitness memberships taxable if they’re part of an employee’s pay. There are some exceptions, but employers should consult tax guidance to ensure compliance.

How to start offering an employee fitness reimbursement program

Launching an effective program can feel complicated at first, with budgets, policies, eligibility, and providers to juggle. The good news is that with a clear process, you can go from idea to implementation without getting lost in the details. Here’s how to break it down:

Step 1: Understand your budget 

The first step is simple: figure out what you can afford, and how often you can afford to deliver it. Most companies set a monthly reimbursement allowance per employee. The exact number depends on your overall benefits strategy, team size, and financial goals, but having a clear budget upfront allows you to sustain the program long-term. 

Step 2: Consider eligibility 

Next, decide who will qualify for the benefit. Will it be limited to full-time employees, or extended to part-time staff and contractors? Generally, companies that make programs accessible to anyone working 30 to 40 hours a week see the strongest participation.

You may also want to think about participation requirements; for example, encouraging regular use so the benefit doesn’t go to waste. But be careful with what you require from usage conditions: strict requirements can unintentionally exclude people, like those returning from parental leave, employees recovering from medical treatment, or staff who travel frequently for work and have skipped the gym for a couple of weeks. 

Step 3: Pick a policy provider

Once the basics are set, you’ll need a partner to bring the program to life. A good provider will guide you on policy design, handle the logistics of processing claims, and make sure your remote employees can access the program just as easily as in-office staff.

Step 4: Educate your employees 

Even the best-designed program falls flat if people don’t know how to use it. Take time to communicate the details clearly, including what’s covered, how to submit claims, and how much they can get reimbursed. Work with your provider to set up a smooth enrollment process so employees feel confident from day one. 

Step 5: Monitor and adapt 

Finally, keep an eye on how the program is performing. Track adoption rates, measure engagement, and check in with employees through quick surveys. If enrollment is low, more education might help. Meanwhile, if engagement drops off, it might be worth expanding what expenses qualify. Remember: The best programs evolve with your team’s needs. 

Optimize your employee benefits with Benepass

The overarching goal of fitness benefits is to give employees the tools they need to stay healthy, without making it hard to use them. That’s where Benepass comes in, as a versatile, people–first benefits administration platform. 

Employers fund Benepass plans by setting a monthly or annual allowance that works for their budget. Employees receive these funds directly through the Benepass platform and card, so they can use them right away without the need to file a long-winded reimbursement claim. 

There are two ways companies often approach this:

• Benepass Wellness: A dedicated wellness benefit where employers allocate funds specifically for fitness and well-being expenses like gym memberships, classes, or personal training.
• Lifestyle Spending Accounts (LSAs): A flexible benefit where employers pre-fund the account with a set amount and range of eligible expenses. From here, employees choose how to spend their funds, whether on fitness, childcare, professional development, or other life needs.

Both options give employees upfront access to their benefits while allowing employers to stay in control of their budget and policy. 

Ready to reimagine your fitness benefits? Book a free Benepass platform demo today.