It’s not very often you get to say, “The IRS just made it easier to save money on taxes!” But that’s exactly what just happened.
On October 18, 2022, the IRS announced that employees who use commuter benefits can now spend up to $300 per month tax-free starting on January 1st, 2023. That’s $20 more each month in tax-free dollars (up from $280 per month) that your employees can dedicate to the cost of taking the subway, bus, train, rideshares, trolleys, light rails, water taxis, ferries, and traditional vanpools. It can even be used to cover the cost of parking.
If you’ve been thinking about adding a commuter benefits program – now is the perfect time!
$300 in pre-tax dollars puts money back in your employees’ pockets
Let’s face it, inflation isn’t going anywhere any time soon. In January 2021, we sat at an inflation rate of 1.4%. At the beginning of this year, it increased up to a shocking 7.5% and currently, we’re sitting at a rate of 8.2% with no relief in sight.
With 77% of Americans being anxious about their financial situation, a bump of $20 more per month in commuter benefits would be helpful to your employees. The more your employees save, the more they can spend on the essentials they need to live.
So how much exactly would your employees pay? If your employees were to allocate a commuter benefits program, they could save an average of $700 per year.
Your company would save too
Here is some awesome news. Not only are your employees saving money, but so are you.
Your company can save 7.65% on payroll taxes and an average of $40 per month for each participating employee when you add a commuter benefits program. A company with 50 employees can save over $24,000 annually.
Those are some pretty good numbers.
How Get Started
Now, employees can’t claim commuter benefits on their own. You, the employer has to grant them that right by creating a commuter benefits program. As you’ve just seen, with commuter benefits in play: Everyone saves, and everyone wins.
Take advantage of the rise in monthly benefits, by starting your own program today! Here at Edenred, we can help you get started simply and quickly. In fact, we’ve helped over 10,000 companies (of all sizes) already do that!
