AL-53 · Compensation & Benefits

Tuition Reimbursement
True Value Calculator

Your employer's tuition benefit is worth less than the headline number. Model the true net value: IRS Section 127 tax savings, clawback risk (pro-rated if you leave early), opportunity cost of study time, credential salary lift, and — for California employees — the 2026 AB 692 enforcement risk on stay-or-pay clauses.

📊 IRS Section 127 limit $5,250/yr (2024–2025, unchanged since 2002) · CA AB 692 effective 2026-01-01 · BLS wage data May 2024. All regulatory data embedded.
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Your Benefit Package Employer Offer
Max $5,250/yr is tax-free under IRS §127. Amounts above are taxable.
Tuition only. Include fees; exclude books and living expenses.
Federal marginal rate. Add ~5–10% for state. Used to value tax-free benefit.
Clawback & Retention Risk Key Variable
Typical: 12 months (100% clawback) or 24 months (pro-rated). 0 = no clawback.
% of reimbursed tuition you must repay if you leave within clawback period. Many plans are pro-rated (e.g., 100% if <12 mo, 50% if 12–24 mo).
Your honest estimate. Average voluntary turnover rate: ~15–20%/yr.
CA AB 692 (effective 2026): stay-or-pay clauses broadly banned for contracts signed after Jan 1, 2026.
Time Cost & Credential Lift
Typical: 30–40 for part-time programs
Salary ÷ 2,080. The value of your non-work time.
Typical for employer-sponsored certs: 5–15%. MBAs: 20–40%.
True Value Summary
Full Value Waterfall
Break-Even & Sensitivity