Employee tuition reimbursement programs boost retention, professional growth and overall company value. The cost of tuition continues to rise despite millions of Americans not participating in the workforce. By implementing a tuition reimbursement program, companies can become more attractive to applicants and improve their existing team. As a business owner, you should considering setting up a tuition reimbursement plan for employees to cover a percentage of tuition costs. In this post, we’ll cover how to setup an employee tuition reimbursement plan at your company.
Follow Education Assistance Limitations
Before setting up the tuition reimbursement plan for small business, follow the limitations set forth by the American Taxpayer Relief Act of 2012. This law extended employer education assistance to exclude up to $5,250 per year in income. These funds can be applied to undergraduate and graduate level courses. In fact, the act applies to educational expenses regardless if they are related to the current job or not. Ideally, employees can upgrade their knowledge and skills, bringing new abilities to their current employment. This favorable tax treatment is a win-win for employers and employees. Speak with a financial professional about setting up your plan within the limits.
Setup Your Tuition Reimbursement Criteria
In order to setup your reimbursement or assistance program, you’ll have to define the criteria. Usually, these plans require a written document. Specify whether employees will be paid back after paying for their tuition or loans. Tuition reimbursement program cover costs only after payment has been made and the semester has been completed. Meanwhile, tuition assistance plans will make payment upfront for the cost of tuition. Additionally, you may want to include other criteria like, course types, textbooks, and institutions. Tailor the program to the cost-benefit of the business and the needs of your employees. This way, you can design an educational benefit plan for your small business.
Draft Your Tuition Reimbursement Policy
After defining the criteria, write a policy for your tuition assistance or reimbursement program. Oftentimes, business HR departments can create the literature and documents for employees to sign. For small businesses, you can simply create a plan document to define eligibility. Then, create a form so that employees can request authorization for the benefit. They may have to sign a document that shows their understanding of the requirements and level of reimbursement. Plus, you may have to inform your accounting team of the plan to ensure taxation requirements are met. Then, the employer and employee should both sign the reimbursement agreement. These policies and paperwork are critical to ensure that both parties understand the terms of the program.
Implement Employee Benefits Administration Software
Additionally, consider signing up for an employee benefits software. Rather than spending time managing various accounts and payment, you can automate the reimbursement and assistance through a platform. Benefits administration software allows you to automate rules, rejections and approvals. They have self-service portals and brochures that employees can access on their own. Plus, your team can easily sign up for new benefits through enrollment modules and updated carriers. As a result, you can lower your risk for compliance or legal issues. Thus, benefits administration software can reduce cost and automate your tuition reimbursement plan management.
Start Marketing Your Tuition Reimbursement Plan
With a plan and system in place, start telling employees about your tuition reimbursement plan. These benefits packages will help you recruit new employees while rewarding existing team members. Explain your new plan benefits including employer-assisted student loan repayment or tuition reimbursement. Depending on the plan structure, you may choose to add addition benefits like college savings incentives and employer matching. Encourage new and existing employees to join the plan. Schedule a demo or a presentation so that everyone understands the benefits. This way, they can be participants depending on their current financial status and educational goals. Certainly, share your tuition reimbursement plan with your company and potential candidates.
Follow these steps to setup your own tuition reimbursement program for small business. Review the current rules, regulations and limitations for the program benefits layout out by your local jurisdiction. Then, outline the tuition reimbursement or assistance criteria that must be met for eligibility. Write the policy documents, authorization forms and agreements. Or, implement social security benefits administration software for your small business. Then, share the plan with your company and encourage employees to enroll. With some new participants, you can start your educational benefits plan and create a win-win for everyone working at the small business.