Commuter Benefit Solutions Blog

Which Expenses are Covered Under Commuter Benefits

Posted by the Commuter Benefit Solutions Team May 27, 2019

Commuter-Benefits-Expenses

If you are wondering about which expenses are covered under commuter benefits, we’ve got some answers.

First, here’s a brief explanation of how it works.

How Pre-Tax Commuter Benefits Work

Employers sign up to give commuter benefits to their employees. Commuter benefits allow employees to set aside pre tax dollars in their paychecks for their commuting costs.

The company saves because it pays less in payroll taxes, and the savings increase with each employee who takes advantage of the program. For example, a company can save up to $41 per month per employee. If you had 50 employees take advantage of commuter benefits every month for 12 months, you could save as much as $24,000.

Employees also save up to 40 percent in payroll costs because they can set aside a maximum of $265 per month from their paychecks to pay for commuting.

Which eligible expenses can be covered by commuter benefits?

So what can an employee do with all that money set aside every month? There are a lot of options. Some local commuter benefits ordinances may vary slightly, but here the main options for employees. Here are all the options you can take advantage of:

Public transportation
Subways
Trains
Buses
Ferries
Trolley

  • Parking
    Meters
    Garages
    Lots
  • Ridesharing
    Lyft Shared
    Uber Pool
    Via
  • Bike maintenance and repairs

Public transportation. Parking and Ridesharing: what do you need to know

If you need to take public transportation to work, chances are commuter benefits can benefit you because in most cities, and some rural areas, there is a bus system for the area.

While not everyone can take a subway or train, for example, you can use commuter benefits if you drive.

Drivers are allowed to use it for qualified parking. According to the IRS guidelines for fringe benefits, qualified parking is parking you provide to your employees on or near your business premises. It includes parking on or near the location from which your employees commute to work using mass transit, commuter highway vehicles, or carpools.”

Finally, commuters can use benefits for rideshares through companies like Uber and Lyft. Rideshares differ from ride-hailing. With rideshares, you are sharing the vehicle with other riders.

If you want to learn more about commuter benefits, download the 101 Guide.
Commuter Benefits 101 Guide  Learn How Commuter Benefits Work

Topics: Commuter Benefits 101