Commuter Benefit Offerings Increase
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.