What are commuter benefits? And why do you need to know about them? Let’s explain!
Commuter benefits cover transit and parking costs for employees who must commute to a work site. For employees, it means pocketing more each paycheck and increased morale. And the pay-offs will be huge for you, their employer, too.
You can think of commuter benefits as similar to insurance benefits. Imagine when you hire a new employee, instead of just offering them retirement and health care and vacation days, you can offer them a ride to work (or reimbursement for their ride to work). Your employees will use tax-free money on their commute and you’ll save big by reducing your payroll taxes and keeping your employees.
People are spending more and more money getting to work. In fact, households can spend roughly $9,000 on their commute, parking, and vehicle maintenance. Commuting to work is a big chunk of that change. That’s why 83% of job seekers think the most appealing part of a job offer is the compensation offered and that includes benefits, such as commuter benefits. To stay competitive in the job market, offering commuter benefits will set you aside from other employers.
Pre-tax money, up to $280/month via IRS regulations, can be used towards transportation for commuters. Plus, you’ll save at least $40 a month per employee and 7.5% on your expenses for payroll taxes. That can really add up. What’s more, some cities are requiring employers with 20 or more employees to offer commuter benefits by law. If you don’t already have to offer commuter benefits, there’s a good chance you will have to in the near future.
You can get ahead of the game, save money, and attract and retain employees by reducing their costs for commuting, and the costs you pay too. In the end, it all adds up to include commuting and transportation to your benefits package.