When people hear about commuter benefits, many automatically think, “Eh, that wouldn’t work for me and my company. We don’t live in some big place like New York or San Francisco.”
And yes, living in these big cities certainly do offer commuters more choices in public transportation.
But what about the city of Decorah? Ever heard of it? Decorah is a rural town in Allamakee County, Iowa with a population of a little over 7,000. And Decorah offers public transportation! They do this through the EARL Transit Program which is a bus that can be scheduled by any member of the community, and provides rides to work, appointments, getting groceries, and errands.
Even in the smallest of towns, providing your employees up to $280 per month in pre-tax dollars to take public transportation is 100% possible.
There are approximately 6,800 organizations in the United States that provide a form of public transportation. Curious to see if your area is on the list? A list provided by the American Public Transport Association breaks availability down by state and later by county and town.
What qualifies as a mode of public transportation?
You may be wondering, “what does my $280 a month in commuter benefits cover?”
Here’s the full list of modes of qualified public transportation you can use to get to work:
- Buses
- Light rail
- Subways
- Commuter trains
- Streetcars and trolleys
- Cable cars
- Vanpool services
- Ferries and water taxis
- Paratransit services
- Monorails / Tramways
- Rideshares
- Parking
Does pre-tax mean no tax?
If used correctly on the modes of transportation mentioned above, then yes!
When employees set aside up to $280 in pre-tax money each month, they save on taxes, and so does the employer. Exactly how much? Well, let’s find out the average savings.
If you’re an employee, you can save an average of $700 a year. If you’re an employer, you can save $40 per month for each participating employee and 7.65% on payroll taxes.
Sounds great, but how do you run a commuter benefits program?
The one thing you really need when running a program like this is flexibility. And the best way to offer that flexibility is through a prepaid card.
Every month your employees’ card is loaded with their funds that helps them get to work in a more sustainable way. They can use it for any allowable form of transportation and parking.
The best part? You don’t have to complete a lengthy application or file any cumbersome paperwork to offer this benefit, you can get started almost immediately.
How Edenred can help
At Edenred, we’ve helped 10,000 companies, offering benefits to more than 10 million eligible employees.
We not only help you communicate this benefit to your employees, but we offer an entire system including prepaid cards and an easy-to-use app.
We’d love to talk to you about starting a commuter benefits program of your own (wherever you may be located)! Schedule a meeting with us today so we can discuss the best options for you and your employees.
