Commuter benefits offer significant benefits to employers and employees who use them. They help save the environment by putting fewer cars on the road. Employees have less stress getting to work. They can use their commuting time to prepare for the workday.
Commuter benefits are a way companies can differentiate themselves from the pack and one of the few benefits that allow both employers and employees to save money.
Here’s a look at how that money-saving process works for both employers and employees.
How commuter benefits work
Commuter benefits allow commuters to use tax-free dollars to pay for commuting costs. Employers can start a program that enables employees to reduce their taxable income. The money is paid through several different ways, including vouchers, smart cards, transit passes, debit cards, reimbursements, and more.
Employers save on taxes
If you own a business or oversee a company’s finances, would you like to reduce your taxes every year? Commuter benefits can give you that option. Employers pay less in payroll taxes because their employees are saving money tax-free for commuting costs.
Employers save about $40 per person per month thanks to commuter benefits. A business with 50 employees enrolled in the program saves on average $24,000 for a year.
Less taxable income for employees
Employees benefit from commuter benefits by reducing their taxable income. They do that by spending up to the IRS limit of $280 per month tax-free from their paychecks.
If you’re making $55,000 per year and receive commuter benefits through your employer, you will take home nearly $1,500 more than someone who has the same salary and commuting costs but does not have commuter benefits.
There’s a lot of savings available from commuter benefits. If your employees are taking mass transit or paying to park, there’s a good chance commuter benefits can help everyone. Book a meeting with us today so we can help you get started.