Commuter Benefits REWARD Employers and Employees.
Helping your employees beat the delays and stress of daily commuting is one sure way to cut company expenses.
Whether you are providing transit passes, promoting vanpools, or covering bicycle commuting expenses, it’s good to know how such measures produce tax benefits for both the employee and the employer.
Latest Commuter Tax Benefits
Employer's Tax Guide to Fringe Benefits [PDF]
What’s Good for the Employee is Good for the Company.
There are many benefits to helping your employees utilize an alternative form of transportation. Under Section 132 (f) of the Internal Revenue Code, employees are allowed to set aside up to $245 per month pre-tax for transit or vanpool expenses (or $20 for bicycle commuting expenses), similar to a flexible spending plan for medical expenses.
Here's how your organization can take advantage of the savings:
- The employer pays the cost of a transit pass or vanpool seat (up to $245/month) and is able to deduct the cost of providing the benefit.
- The employee and the employer can share the cost of the transit pass or vanpool seat and both share in the savings.
Regardless of how the benefit is paid for, the employee pays no income tax on the benefit and the employer saves on payroll taxes.