Tuition assistance reimbursement programs are an ideal benefit for companies to offer. These programs allow you to notify the company of potential degrees or educational programs that can benefit the company. The tuition reimbursement policy contains multiple sections and requires proof of payment and completed grades. As an employer, you can draft a tuition reimbursement policy to manage or budget your finances for this new benefit. Typically, companies offer 2-3 deadlines throughout the year and approximately $2,000-$3,000 of reimbursement. Despite the costs, these programs are essential in creating a business growth strategy – especially for businesses that are committed to constant improvement. In this post, we’ll cover how to budget for your tuition assistance reimbursement program.
Establish Eligibility For Tuition Reimbursement
First, to budget for tuition assistance costs, you’ll have to know how many employees are eligible. Before enrolling in an educational course, employees must notify their manager and the CEO of the intended degree or program. In the application, you should provide the program curriculum. Additionally, employees must meet the following criteria. They are usually a regular employee, working 20 hours per week on average for at least 2 years. Employees should be currently employed, otherwise the benefit is terminated with employment. The course curriculum should align with the business interests of the company. In some cases, the employee must earn a B average for each course to receive reimbursement. Typically, employees should be in good standing without disciplinary actions and strong track record of growth. Based on these criteria, you can evaluate how many employees at the company are potentially eligible for reimbursement.
Define The Qualifying Programs And Scope
Next, you should outline the degree programs, expenses and costs that are reimbursable. First, depending on the company policy, the programs that are covered include GED programs, Associate’s degrees, Bachelor’s degrees, Master’s degrees or PHD degrees. In some instances, you may want to incentivize certifications, PMP programs, or skills-based courses. The classes are coursework must be completed outside of working hours of the company. This way, the course work should not impact the performance of the employee or the company’s bottom line. Further, approvals for budget should be given based on relevancy of coursework and educational programs. By clearing defining the program requirements, you can carefully consider the financial implications of offering a tuition assistance plan.
Set The Tuition Reimbursement Budget
To budget for your tuition assistance program, set the allocation budget. Companies typically set the budget around $2,500. However, there are tax free incentives to employees up to $5,250 per calendar year. Fortunately, you can set a maximum overall business finance budget for the company. And, this budget can change from year to year. Additionally, you should note that the tuition reimbursement funds do not roll over or carry over form year to year. Depending on the profitability of the company, you should set a budget that is affordable if a high percentage of employees wanted to join. Before making a decision, speak with your accountants and financial professionals. The budget allocation can have a major impact on the margins and costs of the business.
Calculate Costs As An Investment
When preparing your tuition assistance reimbursement program budget, you should always consider these expenses as an investment. Once their program is completed, employees with an undergraduate or graduate degree add tremendous value to their organization. They can introduce new ideas, strategies, tactics, and processes that propel the company forwards. Also, employees will feel more loyal, motivated, and committed to their careers when these programs are in-place. After all, it shows that there is clear interest in their growth and constant improvement. Definitely, calculate costs as an investment when preparing a tuition assistance reimbursement program.
Remember The Long-Term Benefits
If you become overwhelmed when looking at the numbers, remember the long-term benefits of budgeting for employee tuition assistance and reimbursement. For a start, educational financial support programs are a powerful tool for recruitment. Over two-thirds of employees recognize tuition reimbursement as a deciding factor for selecting a company to work for. Inspired by career development, these programs additionally aid in employee retention rates. Plus, these programs offer significant tax benefits for companies. In fact, businesses can deduct roughly $5,250 per employee with qualified assistance programs.
There are several steps to start budgeting for tuition assistance reimbursement programs. Start off by establishing clear eligibility criteria. Next, define the qualifying programs, payment terms, and scope. From here, set your company budget for the educational assistance programs (EAPs). Of course, remember the long-term benefits of offering these benefits at your firm. It may also help to calculate these costs as a long-term business investment. Follow the points above to learn how to budget for your tuition assistance reimbursement program.