Whether you are new to commuter benefits or just need a refresher, here’s everything you need to know.
The Definitive Guide to Commuter Benefits
Commuter benefits give employees the opportunity through their employer to use tax-free dollars on commuting costs and keep more of what they earn in every paycheck. Companies that offer commuter benefits also save money by reducing payroll taxes.
Watch this video and see how your company and your employees can take advantage of huge savings.
How Commuter Benefits Work
Commuter benefits allow employers to support their employees when it comes to their daily commute. Commuter benefits include parking benefits and transit benefits, as well as benefits for vanpool and bicycle commuting.
When an employee enrolls in a commuter benefits program, they can pay for their commuting costs with pre-tax money, up to the current IRS tax limit of $280 / month.
Because of the various ways employees commute, by car, bus, subways, trains, ferries, and vanpools, there are several ways employees can receive their benefit so that everyone is covered. For example, their tax-free dollars can be provided to pay for their commuting costs using:
Parking Cash Reimbursement
Once employees have enrolled and provided their commuting information, they can then receive their commuter benefit product directly at home, or at the workplace.
It’s up to you, the employer, to choose the option that will work best for your company and your employees. We’ll help you make the right choice.
What should you expect from an ideal commuter benefits program?
The ideal commuter benefits program will have online platforms for both employers managing the program and employees participating in it, one that will offer ease, convenience, and flexibility for the ongoing monthly distribution of benefits and the ability to change when the commute changes.
This also comes with a dedicated support team from the provider who have specific knowledge and expertise in commuter benefits and employee commutes.
Commuter Benefits in a Nutshell:
A company implements a commuter benefit program
Employees are enrolled to take advantage of the benefit
Employees use up to $280 tax-free dollars to go to work and back
Employees save $700 per year and companies save $40 per month for each employee
Commutes That Are Covered
A wide variety of commuter benefit products ensures that no matter how an employee commutes, they can enjoy the savings and convenience of the benefit.
In addition to the benefits that are covered by pre-tax dollars above, we also offer a biking benefit. Although there are no tax benefits to employers who offer biking, it is a great perk to offer for employees who may bike to work. The biking benefit allows commuters to spend up to $20 a month for equipment and repairs.
Employer and Employee Savings
Employers save an average of $40 per month for each participating employee. If 50 employees participate over 12 months, the company can save over $24,000 annually.
On average, employees save $740 each year, or more when they set aside up to $280.00 a month to pay for transit commuting expenses.
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.
Employees are subject to taxes on the money spent commuting without commuter benefits. The savings here are helping employees reduce the cost of getting to work each day while employers save as well.
With commuter benefits everybody saves money!
Commuter Benefits Calculator
Try the calculator and see how much your company could save on payroll taxes.
How to Get Started
Book a 15-minute call with a member of our team so we can understand your company’s needs.
Our specialists will build a program that’s right for you and get you signed up.
We’ll take care of the rest, including helping with the on-boarding process of your employees.
The Commuter Benefits Law
Many cities and regions have passed mandatory commuter benefit ordinances. These ordinances require businesses with a minimum number of employees to offer pre-tax commuter benefit programs.
These are the regions that currently have a commuter benefit ordinance in place:
Berkeley & Richmond, CA
10 or more employees who work at least 10 hours per week
(Effective on January 1, 2020) 20 or more total employees
New York City
20 or more full-time employees who work at least 30 hours per week
(Effective, but enforcement is anticipated to be March 1, 2020) 20 or more total employees
San Francisco Bay Area
50 or more full-time employees who work at least 20 hours per week
20 or more total employees
Does your city mandate a commuter benefit ordinance?
If your company operates in one of the places above, offering a commuter benefits program is legally required. Toolkits are available for each city to help companies to be compliant with the ordinance and deliver a valuable benefit to your employees.
Why Offer Commuter Benefits?
Non-traditional benefits can help employers stand out by offering unique perks that can be meaningful to employees, positively impact company culture, and help retain top talent.
With time and costs to get to work continuing to increase, commuting remains a major decision making factor for employees when accepting an offer or changing jobs. When it comes to the total benefits package, employee expectations are changing. The benefits you offer need to keep up with those expectations.
Top reasons to offer commuter benefits:
Employees save on commuting costs while employers save on payroll taxes
Attract, retain and engage employees
Create a happier, less stressed and productive work environment
Easy, hassle-free sign up leaves more time for other important tasks
Did You Know?
Nearly one in four employees have left a job due to their commute.1
Why Choose Us?
First, we live and breathe commuter benefits. Our team is dedicated to providing outstanding customer service while offering the best programs for companies of all sizes. At Edenred Commuter Benefit Solutions, our programs combine quality, competitive pricing and full compliance with IRS regulations.
Easy Online Administration
Programs for Companies of All Sizes
In-house Customer Service
Direct Employee Delivery
Simple Sign Up Process
Seamless Transitions From Other Providers