Key Considerations for Small Business Phone Usage

5 Min

Employees are becoming more mobile, and the need to stay in touch with clients, suppliers and employers while on the go is increasingly important. If employees are traveling, working from home, moving between job sites, or expected to be on call or available no matter where they are, you may want to consider providing company-owned mobile phones.

Primary Considerations Business Owners Should Think About Before Allowing Employees to Use Their Personal Phones for Work

Choosing a mobile phone policy for your small business is important. The wrong choice could leave your data unsecured and open to attack, and you could risk losing contacts or paying an exorbitant amount for phone bills and devices.

Losing Contacts

If your company buys employee phones, your company owns the phone. If that employee leaves the company, you can assign the phone to another employee and will still be able to receive calls from clients or other contacts who had the number. If an employee uses their personal phone for work and leaves the company, they may be taking some of your business contacts with them. You could lose clients, suppliers and other important contacts to a disgruntled employee-or worse, an employee who intends to poach your contacts and start their own small business.

Data Privacy and Security

Smartphones are basically small computers and can store a variety of data-emails, company documents, contact information, etc. can all be kept on a phone for ease of access. A security breach can allow this data to fall into the wrong hands. When a small business allows employees to use their personal phones for work, the business owner has far less control over device security. Employees may not have the most secure phone model, or may not keep the operating system up to date.

When you provide company-owned phones to your employees, you can routinely back up the devices' content. You can implement antivirus software and enforce data encryption on the devices, as well as require strong passwords and regular password updates. These security measures are important in any industry, but are considered extremely important in regulated industries such as healthcare and finance.


If your small business is not providing employee phones and is instead following a BYOD or "bring your own device" strategy-where you reimburse the cost of employee phone bills-you will need to be aware that the rates for the bills will vary. One employee may have a better contract than the next. The dates of those bills will likely vary as well, and you could be paying some employee cell phone bills multiple days per month, rather than batching the process and paying all cell bills on one day, as would be the case if you provided employee phones. However, a BYOD plan does have a cost advantage to consider - you don't need to pay for a new smartphone and/or tablet for each employee. When employees bring their own devices, you aren't out that upfront cost of paying for the device itself.

When you provide employee phones, you are in charge of selecting the plan and will know what your monthly bills are. An additional benefit to purchasing multiple phones for your employees is the ability to negotiate a better rate.

At What Point Should a Business Think About Getting Employees a Work Phone?

The decision to pay for employee phones is a big one. There are many factors to consider, and you need to evaluate your own business needs. The first and most obvious is, of course, do your employees need to be available for calls all the time? If your employees are simply in the office or at one job site, a business phone probably isn't required. Remember that you don't need to provide phones for every employee, either; some job positions may involve being available or in contact more than others.

Another factor to consider is the size of your company. Will you be able to afford the number of devices you need? What about the cost of maintaining all of them? Your IT department or outsourced IT support will likely be tasked with maintaining security and updates unless you work with a dedicated, trusted third-party provider.

Security is something else you need to consider. Do your employees handle any private data? Employees may not need to access sensitive information, in which case they probably don't need a company-owned device. Are you working in a regulated industry such as healthcare or finance? If you are, data security is imperative; you will want to ensure that employee phones are kept as secure as possible, which is easiest when the business owns the phones.

Can Any or All of the Cost of Employee Phones be Deducted at Tax Time?

For a small business to deduct the cost of employee phones, the cell phones would need to remain the property of the company, and be returned if the employees leave the company. If the employee is expected to keep the phone, it would be considered taxable earnings against the employee. The value of the phone depreciates over a seven-year schedule, which allows you to write off the loss in value from wear and tear.

When it comes to paying the phone bill, the best option is to request itemized phone bills for each employee, showing what percentage of the phone usage was for business. If 70% of the phone usage is for business and 30% for personal use, 70% of the cost of the phone bill can be deducted.

Whether or not you provide company-owned mobile phones to your employees is ultimately up to each small business owner to decide. Not every employee needs to stay in constant contact or work remotely with a phone or tablet. If your business isn't very large and your employees aren't handling sensitive information, a BYOD plan may be the most cost-effective choice. If you are concerned about security and the varying costs of BYOD, paying for employee phones is likely the better route.