Among the benefits to employees is the ability to return to college or to pursue an advanced degree. While returning to school, on top of going to work, will in most cases add stress to the employee, they will not have to worry about how they will pay for school, reducing the financial pressure to juggle school expenses with other necessities. Additionally, companies that value employees by offering tuition assistance and reimbursement will most likely have other benefits that will enhance company loyalty.
While tuition reimbursement programs may seem to be an extra, and potentially expensive, cost to employers, in the long run, the employer can come out on top. Not only does a tuition assistance program help the employer attract and retain quality employees, but it can also help to train, educate and empower employees to serve in multiple roles in the company as future leaders with their higher education. Employers also benefit from increased employee loyalty and morale, which can mean increased productivity. According to All Online Schools, 61 percent of employees surveyed claimed that if they received job-funded training, they would plan to remain with a company for at least the next five years.
Since 1996, tuition reimbursements have been tax-free for employees in amounts up to $5,250. According to Salary.com, if a company happens to pay more than the tax-free amount, the employee will be held liable for paying taxes on those reimbursements. The tax-free benefit is applicable for students pursuing both undergraduate and graduate degrees. As tax codes change yearly, it is important to keep up with any changes by visiting the Internal Revenue Service website and researching educational expenses for the current tax season.