However, a majority (62%) of employers are concerned that by doing so, they will need to boost their employees’ salaries to make up for increasing commute costs. According to a TransitCenter news release, only 53% of survey respondents are aware of tax-free commuter benefits allowed by the IRS, and of those aware only 46% offer the benefit to their employees, with 14% planning to add it to their overall benefits packages.
Overall, 40% of companies offer a commuter benefit program, with the top benefits offered including flextime (49%) and telecommuting (42%). Just 8% offer vanpooling, and 6% offer carpooling, the news release said.
Employers cite “cost savings,” “enhancing overall benefits,” and “attracting/retaining employees” as the top three reasons for offering tax-free commuter benefits.
The TransitCenter reminds employers in the news release that since 1993, the Internal Revenue Service has allowed workers to set aside a portion of their gross income, up to $115 per month, to pay for transit and vanpool commuting costs. Employees who participate can achieve tax savings equivalent to 30% to 40% of their out-of-pocket commuting expenses, and offering a commuter benefits program can also help employers lower their payroll taxes. The benefit is typically delivered via a debit card, transit pass, or payment voucher on a monthly or quarterly basis.
A copy of the 2008 TransitCenter Commuter Impact Survey report is available by contacting Charles Kim at firstname.lastname@example.org .
« DC Providers in UK Differ in Default Offerings