Pre-Tax Commuter and Parking Benefit Programs

Pre-Tax Commuter and Parking Benefit Programs 2018-03-15T23:57:24+00:00

Tax-Advantaged Transportation Benefits, Well-Traveled

Employers that extend commuter and parking benefits to their workforce can save up to 7.65% on their payroll taxes, and employees that tap into the pre-tax transportation offerings can potentially save more than $1,300 each year.

It doesn’t just stop at saving you and your employees money, either; these programs give employers a leg up in:

  • Recruiting and retaining talent
  • Building a well-rounded workforce with a broader reach
  • Promoting environmental responsibility through shared and public transportation
  • Demonstrating a strong commitment to work-life balance


Governed under Section 132(f) of the U.S. federal tax code, qualified expenses include parking and work-related transportation (trains, buses, bikes, subways, ferries, and vanpools).

Pre-Tax Commuter and Parking Benefit Programs

Why Select CYC as Your Commuter Benefits Plan Provider?

ConnectYourCare (CYC) makes it easy for your company to offer pre-tax commuter and parking benefit programs. We work with transportation providers and parking companies nationwide. With more than 100,000 individual products available, we’re sure to be able to meet employees' needs.

Transportation and parking benefit options available from CYC include:

  • Transit passes

  • Commuter check voucher for transit

  • Direct pay for parking

  • Bicycle commuter benefit

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Savings Scenarios

The IRS allows up to $255 a month pre-tax for transportation costs and up to $255 a month pre-tax for parking costs.

Employer Savings

Your company can save up to 7.65% on payroll taxes as employees use pre-tax dollars to cover their commuting expenses. Example:

  • 200 participants spending $255 per month on commuting expenses
  • 200 participants x $255 = $51,000
  • $51,000 x 7.65% = $3,901.50/month
  • Annual employer tax savings = $46,818

Annual Employer Tax Savings

$0

*Estimate only, based on 200 participants spending
$255 per month on commuting expenses

Employee Savings

By participating in this program, employees can pay for their commutes with pre-tax dollars and save on income, Social Security, and FICA taxes. Example:

  • Employee A does not use his monthly parking benefit
  • He purchases a monthly parking pass for $255, reducing his spendable income by $255
  • Monthly Savings: $0
  • Employee B does use her monthly parking benefit
  • She purchases a monthly parking pass for $255, reducing her spendable income by $178.50
  • Monthly Savings: $76.50*

Monthly Employee Savings

$0

*Estimate only, based on employee using monthly parking benefit purchasing a monthly parking pass for $255, reducing spendable income by $178.50

Pooling with Partners: Uber and Lyft Rideshare Solutions

Through partnerships with Uber and Lyft, ConnectYourCare now offers a door-to-door solution that allows your employees to pay for shared rides with their Commuter Check Prepaid Mastercard®. For added convenience, employees can pay straight from the Uber and Lyft apps after adding their Commuter Check Prepaid Mastercard information as a form of payment.

UBER

Through Uber, commuters can apply their pre-paid commuter funds toward uberPool, an on-demand ride-sharing service.

Learn More

Likewise, through Lyft, employees can leverage the Lyft Line service to share a ride and save money with their pre-paid funds.

Learn More

Driving Results

By combining Commuter Benefits and a custom communication program, a Fortune 100 client netted over $2.5 million in annual tax savings, while helping participants realize an average savings of $1,000 per employee.

View the Case Study Infographic
45%

Order Increase In Just Nine Months

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Orders per Month
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Number of New Users
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Employer Annual Tax Savings

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