By: Gabriel J. Jacobson and Ian Coddington

In addition to the obvious financial benefit to the employee, employer-funded advanced education can carry financial and soft-benefits to employers, employees, and colleagues alike. These benefits extend beyond the person who is pursuing advanced education.

More Accessible to Working Professionals

As access to online education grows, the number of professionals seeking to advance their education also increases. In 2017, 1 in 6 students enrolled entirely online, and 1 in 3 enrolled in at least one online course. With the advent of the COVID-19 pandemic, schools around the country shut down their physical locations, and students were forced to move to online learning. Now that most students have taken some form of online classes, it is likely that many will choose to continue this method for learning.

Advancing education has become more attractive to employees and employers because it is a more accessible option for working professionals. One tax associate at Meyers Brothers Kalicka recently took advantage of the opportunity to pursue an advanced degree while continuing to work full-time. He enrolled at the Isenberg School of Management at UMass to gain a BBA in Accounting and decided to remain online rather than go in-person. Prior to making this choice, he worked full-time for a few years before deciding he wanted to earn his business degree. He enrolled in a-la-carte online classes immediately to accelerate his degree track before he was officially admitted. Once he was accepted into Isenberg, he decided to remain online so that he could continue working a full-time internship at Meyers Brothers Kalicka which ultimately led to him being offered an associate’s position at the firm. He attributes the combination of full-time school and full-time work to his success, claiming that experiencing real world situations reminiscent of the subject matter of his classes helped cement key concepts related to his profession. He graduated with over a year of real-world professional experience under his belt.

The heart of the online school is the flexible pace; students choose any quantity of classes each semester, meaning they could offload during the busy season, and upload during the slow season. Some employers allocate otherwise unassigned slow season hours to degree earning course work. With the increase in the availability of online education due to the pandemic, companies can leverage this opportunity to attract talent earlier to both their and the student’s benefit.

Tax Incentives for Employers

Employers can sponsor employees with funds for academic training to build job related skills. They may provide up to $5,250 in employer education assistance benefits for undergraduate or graduate courses tax-free each year. To receive the benefit, the funds must pay for tuition, fees, books, supplies, and/or equipment. As an added bonus, these funds qualify for a business deduction and are not required to pay FICA or FUTA payroll taxes. However, the education must be legally required for the employee to maintain their current position, or the education must improve or maintain skills required for the position. One of these two stipulations must be met to satisfy the tax-free treatment. There are limits, as these benefits are for employees only, and not for spouses and dependents. Also, there is no choosing between the education benefit or a cash payment to the employee. Employers should provide these rules and others as a written notice to employees interested in receiving the benefit.

Organizational & Culture Benefits

Outside of the financial benefits, there are workplace benefits to supporting student employees. Collaborative teams are a mainstay of most successful businesses. These teams often group employees with different niches and experience levels, so they translate directly to supporting newer employees’ development through mentorship. Mentorship relationships can help maintain accountability and time management for online student professionals. They can also serve as sounding boards for in-class work and discussion that displays areas of interest of the student employee. For example, the previously mentioned associate nurtured a mentorship relationship with his manager by discussing his primary interests and questions from his corporate tax class. Outside of the mentor relationship, he found solidarity and motivation with peers at his level as many complete online master’s programs to advance their careers. These relationships foster vibrant cultures of positive reinforcement toward educational goals within firms all over the country. Further, this culture can extend beyond the classroom, and cultivate a collaborative and supportive work environment. The human capital, financial, and cultural benefits of incentivizing employees’ advanced education through online learning cannot be overlooked in today’s business climate. With the tools highlighted above, companies should take advantage of this opportunity.

This material is generic in nature. Before relying on the material in any important matter, users should note date of publication and carefully evaluate its accuracy, currency, completeness, and relevance for their purposes, and should obtain any appropriate professional advice relevant to their particular circumstances.