If you’re like the average commuter, you’re spending more and more on commuting. That’s why it’s important to take advantage of programs that can help you save money, like commuter benefits.
Commuting is not cheap. A 2015 survey found that it costs $2,600 per year and 200 hours per week to commute. Costs and commute times have only increased since then. Household transportation costs, including commuting and other expenses like vehicles, average $9,049 per year, according to the Bureau of Labor Statistics.
When you add it all up, it means your wallet can take a significant hit to get to work.
How employees save
Commuter benefits offer commuters an excellent way to save money on their commutes. With commuter benefits, commuters save $700 or more a year when they set aside the maximum contribution the IRS allows, which is $280 per month.
Here’s an example on how that works. If a commuter makes $55,000 per year and receives commuter benefits, they will take home nearly $1,500 more than a person making the same salary and has the same commuting expenses with no commuter benefits.
Why businesses also benefit
Employees are not the only ones who benefit from commuter benefits. Businesses also save money on payroll taxes because employee taxable income is less when enrolled in the program.
Companies can save $40 per month for each employee enrolled in the program. A company with 50 employees could save $24,000 in payroll taxes over 12 months.
Various ways to save
Companies can offer commuter benefits in several different ways, including tax-free employer-paid subsidies, pre-tax employee-paid payroll deductions, or a combination of both.
Commuter benefits can also be offered as a substitute for taxable salaries, a supplemental benefit, or both.
No matter what, employees are subject to taxes on any money they use without using commuting benefits. The benefits allow them to reduce their cost of getting to work.
Help your employees save money by adding commuter benefits to your benefits package. Book a meeting with us today so we can help you get started.