If you’re commuting back to the office in 2022, here’s a refresher on commuter benefits.
What are commuter benefits?
Commuter benefits gives employees the opportunity to tax-free dollars on commuting costs and keep more of what they earn in their paycheck. Employees can decide how much they want to set aside each month, up to $280 a month. They get vouchers or debit cards to pay for the commuting costs, or the vendor is paid directly.
Where can you use commuter benefits?
Commuter benefits can be used to pay for:
- Trains
- Buses
- Subways
- Trolleys
- Water Taxis
- Light Rails
- Ferries
- Rideshares
- Parking, Meter, Garages, and Lots
- Vanpools
How much can employees spend?
In 2022, employees can spend up to $280 tax-free per month for their commuter benefits.
What about employers?
Employers save about $40 per month for each person who participates in the commuter benefits program. Commuter benefits reduce their payroll tax bill for the company because employees spend tax-free money.
Here is a breakdown of the savings. If a company has 50 employees participating, the employer can save more than $24,000 annually.
How are commuter benefits legal?
Commuter benefits are considered a “fringe” benefit by the IRS.
Are commuter benefits mandated?
There is no national commuter benefits law. However, there are several state and local laws. Those laws include:
- San Francisco (Businesses with 20 or more employees)
- Berkeley, CA (10 or more employees working 10 hours per week)
- Richmond, CA. (10 or more employees working 10 hours per week)
- Seattle (20 or more employees working 10 hours per week)
- New York City (20 or more full-time employees)
- Washington, DC (20 or more employees)
- New Jersey (statewide; 20 or more employees working 10 hours per week)
- San Francisco Airport (Employees working 20 or more hours per week)
- U.S. Federal Government (Capitol Region commuters)
- Bay Area Air Quality Management District (9 counties; offers four options to employees)
- San Francisco Bay Region (50 or more employees)
Are you interested in adding commuter benefits? Book a meeting with us so we can help you get started.
