How much can employers offer tax-free for tuition assistance?

Under IRS Section 127, employers can offer up to $5,250 per year per employee tax-free for tuition assistance or reimbursement, with no payroll tax implications. Starting in 2026, this cap adjusts annually for inflation.

What's the difference between tuition assistance and tuition reimbursement?

Tuition assistance pays for courses upfront before an employee completes them, while tuition reimbursement pays the employee back after successful completion. PeopleJoy supports both payment models on a single platform.

Can tuition benefits be combined with student loan repayment assistance?

Yes. PeopleJoy lets employers pair tuition assistance or reimbursement with student loan repayment support in one compliant, integrated program covering the full education benefits lifecycle.

Tuition Reimbursement & Assistance Platform

Feature	Tuition Assistance	Tuition Reimbursement
Payment	Employer pays school upfront	Employer reimburses post-course
Employee Access	Easier, no out-of-pocket cost	Harder, must pay first
Employer Risk	Slightly higher	Lower

Feature

Tuition Assistance

Tuition Reimbursement

Payment

Employer pays school upfront

Employer reimburses post-course

Employee Access

Easier, no out-of-pocket cost

Harder, must pay first

Employer Risk

Slightly higher

Lower

How Can You Maximize the $5,250 Tax-Free Tuition Benefit?

Under IRS Section 127, employers can offer up to $5,250/year per employee tax-free for tuition assistance or reimbursement. Starting in 2026, the cap will adjust annually for inflation.

No payroll tax implications - a simple way to save on taxes

Applies to undergrad, grad, and certificates

Works for both payment models

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How Can You Simplify Your SECURE 2.0 Student Loan Match Program?

SECURE ACT 2.0

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What is Secure Act 2.0?

Under Section 110 of SECURE Act 2.0, effective after December 31, 2023, employers can now consider qualified student loan payments as elective deferrals for employer-matching contributions to defined contribution plans.

For instance, if an employee allocates $400 monthly to a qualified education loan, the employer can treat it as if the employee deferred $400, qualifying for an employer match. Limits apply, such as the annual elective deferral limit and total annual additions to defined contribution plans.

Student Loan Match + PeopleJoy

The PeopleJoy platform simplifies Secure Act 2.0 assistance by managing the certification and calculation process for employee student loan payments. Employees annually certify these payments, a crucial step for employers to calculate matching portions manually, especially as not all 401k record keepers accommodate Secure Act 2.0.

PeopleJoy ensures compliance by tracking and verifying whether the employee, spouse, or dependent incurred the loan. By streamlining these processes, PeopleJoy aids employers in seamlessly navigating the intricacies of Secure Act 2.0, offering clarity and efficiency in managing employer matches and maintaining compliance.

Tuition Reimbursement + PeopleJoy

Your company sets reimbursement criteria, so only certain educational items purchased or courses taken may be eligible for reimbursement. This means HR needs to scour every line item on every receipt for whether an item is eligible, then break out pen, paper and a calculator to flag any discrepancies.

No problem if you have a company with 5 employees, huge problem if you have a company with 50,000.

Photo of Keely, featured in PeopleJoy's testimonial section

Photo of Seye Abolaji, featured in PeopleJoy's testimonial section

Smarter Tuition Benefits That Attract & Retain Talent

Why Do Tuition Benefits Matter More Than Ever?

Attract and Retain Talent

Upskill Your Workforce

Track Measurable ROI

What Does an End-to-End Tuition Benefits Solution Look Like?