Commuter benefits provider, Clarity Benefit Solutions, shares ways that a commuter benefits program can help employees save this summer.
Most companies have at least some employees who pay for parking, use mass transit, or use carpooling services. For companies with urban locations, this percentage is likely very high. Employees often end up spending a good portion of their paychecks on commuting costs.
A commuter benefits program can reduce commuting costs for employees. Participants can set aside a dedicated amount of their income on a pre-tax basis that will directly pay for costs associated with commuting and parking. Since this amount is pre-tax, participants can save up to 30% on their commuting costs.
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Here are some ways that commuter benefits programs can help employees save this upcoming summer.
Mass transit. Employees that take buses, trains, or ferries can pay for the associated costs using a commuter benefits plan. The passes, tokens, fare cards, vouchers, and similar items can be directly purchased using pre-tax dollars.
Carpooling. Recent technology has made carpooling to work as simple as tapping a screen. Apps like Uber Pool and Lyft make it easy and convenient to commute with people going to similar places, reducing individual costs. A commuter benefits plan takes the savings one step further by allowing individuals to pay for carpool plans with pre-tax dollars.
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Parking. Paying for parking at or near workplaces can be expensive, especially in urban areas. Commuter benefits plans allow pre-tax dollars to be used towards parking meters, parking garages, and lots. Additionally, the benefit still applies when the employee parks in a place and continues the commute via mass transit, such as the parking lot of a train station.
As an added bonus, commuter benefits programs can help employers save as well. Since employees pay into their commuter program with tax-free dollars, payroll taxes decrease. A company can reduce payroll taxes by up to 7.65% on each dollar when they have a commuter benefits program in place. It’s a win-win benefit that organizations should consider, especially if they are in an urban location.
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