Overview

Commuter Benefits are a federally approved employer-provided incentive for employees to save money on their transit, vanpool and parking expenses.

The benefit may be offered as pre-tax deductions from employee paychecks, as a subsidy, or as a combination of the two. 

Why Offer These Benefits?
Transportation incentives are proven to improve employee morale and productivity, and are a competitive part of any benefits package. By using commuter benefits, employees save by reducing their taxable income, saving up to 40% on their transit, vanpool and parking expenses. For businesses, savings come as a result of reducing payroll taxes, which could translate into a savings of up to 9% on payroll taxes for each employee. Employers have found that commuter benefits are one of the most cost-effective benefits they can provide. 
 
What's more, commuter benefits encourage people to walk, bike, rideshare and take transit to work. This helps relieve traffic congestion and improve air quality, making our cities and regions better places to live.
 
IRS Guidelines
Effective January 1, 2014, the IRS pre-tax deduction limit is $130/month for transit and vanpool expenses and $250/month for parking expenses. $20/month may be offered as a subsidy to employees who commute via bicycle. To see the full federal regulations, please read the IRS’ Employer’s Tax Guide to Fringe Benefits (Publication 15-B) and the IRS Revenue Procedures (rp-11-52)