Vocations · Professional Development · Benefits

School on the
company, after tax.

Type the tuition and your employer’s policy. The calculator splits the help into tax-free and taxable parts and shows what it is really worth.

Value the benefitWhat you get

The tuition reimbursement value calculator

The worked example is a three-year part-time MBA with a $7,500 yearly cap. Nothing you type leaves this browser.

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What you get

Vocations · Professional DevelopmentFree

What you finish with
The reimbursement a year, its tax-free and taxed parts, the value after tax over the program, what you pay yourself, the raise it equals and the amount at risk if you leave early, year by year. It prints as a summary.
Who it is for
Employees deciding whether to use tuition assistance, adults going back to school while working, and job seekers comparing benefits.
Format
Browser calculator for a phone, tablet or computer, by touch or keyboard. Prints a summary; downloads a spreadsheet (.csv); export and import a file.
Access
Free. No account, no sign-in and nothing to install. Everything you type stays in this browser; nothing is sent to Caveat.
Where it lives
The Professional Development space in Caveat Vocations.
Support
Questions, a correction or a request: team@caveatacademic.com.

How to use it

  1. Type the tuition a year.
  2. Copy the share and cap from the policy.
  3. Set the years of study.
  4. Pick your tax rates.
  5. Note the stay requirement.

Value the benefit

How the value is worked out

The employer’s cap, then the federal tax-free limit.

The worked example: a part-time MBATuition$14,400a yearEmployer pays$7,500up to its capTax-free$5,250section 127 limitKept$6,720a year after $780 taxThe worked example: a part-time MBATuition$14,400a yearEmployer pays$7,500up to its capTax-free$5,250section 127 limitKept$6,720a year after $780 tax
The employer’s cap limits the help; the federal limit decides how much of it is tax-free; the rest is taxed like pay.

The $5,250 line

Under section 127 of the tax code, an employer’s educational assistance program can pay up to $5,250 a year for an employee’s education tax-free. Since 2020 the same limit can also cover payments on the employee’s student loans. Above the limit, the help is taxed as pay unless the courses keep up or improve skills for your current job, which can make them a tax-free working condition fringe.

Strings attached

Many policies require a passing grade, approval before enrolling, and staying for a set time afterward or paying the money back. The stay requirement is the cost people forget: it ties a job change to a repayment.

Sources

  1. Internal Revenue Service. Publication 15-B, Employer’s Tax Guide to Fringe Benefits: educational assistance (irs.gov).
  2. Internal Revenue Service. Publication 970, Tax Benefits for Education: employer-provided educational assistance (irs.gov).
  3. U.S. Code. 26 U.S.C. 127, educational assistance programs (uscode.house.gov).
  4. U.S. Code. 26 U.S.C. 132(d), working condition fringe (uscode.house.gov).

An estimate for planning, not tax advice. Your employer decides what is paid and how it is reported. Your entries stay in this browser. Support: team@caveatacademic.com.