Commuter Benefit Offerings Increase

October 16, 2009 ( - Despite concerns about cutting costs during the down economy, most employers are maintaining -- and in some cases increasing -- tax-free commuter benefits as part of their compensation packages, according to TransitCenter's 2009 Commuter Impact Survey.

Eight months after the passage of the American Recovery and Reinvestment Act, which increased the amount of tax-free income employees could use to pay for their mass transit fares from $120/month to $230/month, TransitCenter found that over one-third (35%) of companies surveyed offer a tax-free commuter benefit, according to a press release. The announcement said employees at small businesses have been particularly enthusiastic about the increase in the tax benefit, with TransitCenter showing that 32% of the employees at its existing small business customers who were deducting the monthly maximum of $120 prior to the passage of the bill increased their deductions to above $120 after the bill’s passage.

The survey found flextime (33%), telecommuting (30%) and Transit (30%) are the top commute-related benefits offered by the surveyed companies. Seventy-two percent of respondents indicated they see tax-free commuter benefits as a way to help reduce their company’s carbon footprint.

Companies also listed “cost savings for employees” (62%) and “enhance overall benefits offering” (47%) as the top reasons for offering the benefit. Ninety-one percent said their employees are still concerned about the price of gas, despite a fall off from last summer’s record prices.

As a result of the increase in the transit benefit cap, 27% of companies have seen increased enrollments, 39% have seen an increase in their employees’ pretax deductions, and 7% of companies have increase the subsidized amount offered to employees.

Within Central Business Districts (CBDs), nearly half of companies (46%) offer tax-free commuter benefits to employees, compared to less than one in five companies (19%) located outside of CBDs, the announcement said. These companies also reported higher levels of employee participation in the program – nearly a third (29%) report that half their employees participate, versus just 9% of companies outside the CBDs.