A tuition reimbursement program is when a company pays part or all of an employee’s tuition, with rules and limitations. Companies may limit education to work-related courses or offer reimbursement for any reasonable school activity. Employees must meet certain standards and some of the money provided may not be taxable.
A tuition reimbursement program (TAP) is a program whereby a company pays part or all of an employee’s tuition. There are usually some rules associated with the program as the company wants to ensure a sensible and sensible investment in an employee’s education. These programs may be offered at large companies and government agencies, and sometimes a company that does not have a formal tuition reimbursement program may agree to help an employee by special arrangement or by providing scholarships to valued employees.
At a company that has a tuition reimbursement program, the company wants to encourage employees to pursue professional development. Some companies limit the types of education they pay for, expecting employees to attend training and classes relevant to the type of work the company does, or attend classes that could lead to a higher position in the company. For example, a company might pay someone to get an MBA with the goal of retaining that person and creating an opportunity for advancement.
Other companies may find education in general to be enriching and may offer reimbursement for any reasonable school activity. These workplaces may feel that having an educated workplace is valuable and important and that they will be able to provide better service with more educated workers. Companies can also pay for things like language training to provide bilingual services or training on specific types of equipment to add new skills to the work environment.
Employees enrolled in a tuition reimbursement program are generally required to earn a certain grade point average and cannot drop out of school. If they fail to meet these standards, they are expected to pay the company and may also be required to pay if they stop working while school is in session or if they leave shortly after school ends.
Some of the money provided under a tuition reimbursement program is not taxable. In the United States, for example, up to $5,250 dollars (US) is not taxable. Some companies limit their contributions to the taxable limit, while others pay more, with employees understanding that they will need to pay taxes on funds that exceed the limit. The tax-exempt status of funds from a tuition reimbursement program is designed to act as an incentive for employees and companies who wish to participate in these programs.
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