Employers can support their employees in their daily commute by providing commuter benefits for parking, transit and vanpools, but they can support their own bottom line, as well.
For the employee, the program lets them pay for their commuting costs — public transit and parking — with pre-tax money up to the Internal Revenue Service tax limit of $270 monthly.
They have the monthly cost of their commute deducted from their paycheck before paying taxes. Those tax-free dollars are then put on a debit card, passes, voucher or paid directly to their transit or parking operator, in accordance with Internal Revenue Service regulations.
Commuter benefits are advantageous to an employer, as well:
- Tax savings — Money contributed toward commuting costs of your employees, within Internal Revenue Service guidelines, are a tax-deductible business expense for the company.
- Employee productivity — Employees who rideshare or use public transportation arrive ready to work, rather than spending 20 or 30 minutes shaking off the stress from traffic congestion and parking.
- Recruiting and retaining talent — Job-seekers are looking for good companies with good benefits, and a commuter benefit program demonstrates a strong commitment to work-life balance.
- A better workforce — Employers can build a solid, well-rounded workforce with the broader reach a good commuter benefit can provide.
- Sustainability — A commuter benefit reduces a company’s carbon footprint and promotes environmental responsibility through shared and public transportation.
- Fewer parking needs — Offering financial incentives for employees to use alternative transportation reduces employers’ parking needs and expenses.