Providing Education Benefits for Employees Can Attract Better Employees and Increase Their Value

In this competitive market, getting and retaining employees can be a challenge. Remaining competitive as an employer typically means increasing salaries; however, increasing salaries also means increased payroll taxes, both for the employer and employee. But there are ways to make your company more attractive to potential employees without incurring those additional taxes.

One way to provide additional benefits to employees that can also benefit the company is to provide educational benefits to help them in their current position or to help them advance further in the company or to advance their career. This can be in specific skills training or even tuition reimbursement at the employee’s school of choice. This allows the company to deduct up $5,250 per year per employee for their education. If an employee has any student loan debt, the company can choose to allocate that money towards those loans; however, “the option to use them to pay student loans is available only for payments made after March 27, 2020. Under current law, this option will be available until Dec. 31, 2025.”

What this means is that, between 2024 and 2025, an employer could effectively increase an employee’s pay by $10,500 without either the employer or employee having to pay payroll taxes and without the employee having to pay additional income taxes. This can be a pretty great incentive to attract new employees or retain existing employees while also making the company more competitive!

- John Thrush