When your employees participate in a commuter benefits program, you will both save money. Based on current legislation, your company can offer commuter benefits in the form of tax-free employer-paid subsidies, pre-tax employee-paid payroll deductions, or a combination of both. You can provide this benefit to your employees as a substitute for taxable salary, as a supplemental benefit, or as a combination of the two.
How You Save
Commuter benefits are considered tax-free benefits, not employee wages, so your company can save on average 7.65% on payroll taxes.
How Your Employees Save
Since employees are already paying to get to work, it makes sense to offer them a way to save. Commuter benefits allow employees to set aside tax-free money in their paychecks to pay for their commuting expenses.
Frequently Asked Questions
There is no minimum. Companies can sign up for commuter benefits with just one employee.
- Bus, ferry, train, trolley tickets and passes
- Parking expenses: meters, garages and lots
- Vanpool fees (including uberPOOL, Via and Lyft Line)
- Bike maintenance and repairs
- Transit and eligible vanpooling: $265
- Qualified commuter parking: $265
- Combined parking and transit benefits: $530
- Business trip costs
- Airport parking fees
- Residential parking fees
A subsidy is an employer paid benefit, whereas, a pre-tax deduction is an employee paid payroll deduction. commuter benefits can be offered as either a subsidy, pretax payroll deduction or a combination of both. Offering the benefit as a subsidy is more cost effective when considering giving an employee the equivalent raise in salary due to the tax advantages. For example, a parking subsidy of $250 is roughly equivalent to a $406 pay raise, which would be taxable income. A subsidy saves the employer on payroll taxes and the employee on having to pay additional taxes on a higher income.
If you have Commuter Check Office, we’ll ship all vouchers and prepaid cards to you to distribute to your employees. If you have Commuter Check Direct or My Commuter Check, we’ll ship vouchers, passes and prepaid cards directly to your employees via USPS.
Employees can redeem commuter benefit vouchers at participating transit operators or use the Commuter Check Prepaid Mastercard® at transit kiosks or online to purchase transit tickets or passes. If an employee receives the parking benefit, they can use the vouchers or the Commuter Check Prepaid Mastercard to pay the parking vendors or opt to have us pay them directly. The same goes for vanpool participants.
No, employees can only redeem them for transit passes or use them to pay monthly parking fees.
We offer pretty much any product in any dollar value you or your employees need. Commuter products are available from $10 up to $265 for transit and from $10 to $265 for parking per month.
In order for a vanpool to be qualified as a “vanpool,” 80% of the mileage must be for the transport of employees to and from the place of work; seating capacity must be for 6 employees plus the driver, in which at least half of the seats are used. The van can be operated by the employer, employee or a third party. Employees that participate in a qualified vanpool can use commuter benefits to contribute towards associated costs.
Indeed! If you have Commuter Check Direct or My Commuter Check, employees can sign into their respective accounts and set up automatic reorder.
Nope! No complex record keeping required. However, like any company expenditure, copies of order forms and canceled checks should be retained. But, no special IRS reporting, such as W-2 or 1099 statements, is required.
Depending on which program you select, your account will be ready for order processing in as little as 1-2 business days. On average, the set up process for our more advanced program is complete within 4-8 business days.
If you decide to provide your employees with the biking fringe benefit, then those who ride their bikes to work can be reimbursed up to $20 each month for biking expenses. However, in order to get these benefits, bike riders must meet a couple important guidelines:
- Employees cannot use biking benefits along with transit and/or parking benefits.
- Benefits can only be used toward bike equipment and purchases and any costs associated with repairs and storage.
The Commuter Check Prepaid Mastercard is issued by The Bancorp Bank pursuant to license by Mastercard International Incorporated. The Bancorp Bank; Member FDIC. Cards may only be used for qualified commuter benefit purchases in accordance with IRS Tax Code 132(f). No cash or ATM access. This card may not be used everywhere Debit Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.