Below are a few of the benefits companies and employers can experience through employee commute programs:
Commute alternative programs increase recruitment and retention. Employees perceive their commute as an extension to their overall job experience. These programs give employees choices that allow them to take control of their commutes and feel good about their employer, which increases employee morale. By increasing the commute options available to your employees, you create a positive, productive work environment.
Reduce Tardiness and Absences
When employees carpool, vanpool, or ride the bus, they are more likely to be on time. Additionally, employers report that reducing the stress of commuting reduces absenteeism.
Reward Your Employees
By encouraging your employees to participate in a commute alternative program, you reduce their commute costs and help support their travel choices. Consider adding even more value to your program and implementing a worksite commuter incentive like a monthly drawing, lunch with the CEO, or other fun ideas.
Employers who offer commute alternative programs are eligible for a variety of tax benefits and credits. See below under Commuter Tax Benefits.
Increase Available Parking
If you've ever experienced a shortage of customer or employee parking, then you'll benefit from a commute program. Employees who choose an alternative commute create open parking spaces for customers and reduce the demand for building new and costly parking spaces.
By decreasing the number of trips made by single-occupancy vehicles, you contribute to an improved mobility of goods and services throughout the Northern Front Range.
Be a Good Neighbor
Traffic congestion and environmental impacts are concerns in our region. Companies that provide commute benefits become known as good neighbors, can receive media recognition, and are recognized as great companies to work for.
Commuter Tax Benefits
Commuter tax benefits are an easy way for employers and employees to save money! The IRS allows employers to withhold a set amount of an employee's pre-tax income for vanpool, transit, parking and bike commuting costs.
Employers may also provide a monthly fare subsidy as a part of the qualified IRS Transportation Fringe Benefit, under section 132(F) of the IRS tax code. This lowers an employee's taxable income, putting more money in their pocket. It also lowers the employers' FICA burden. It's a win-win-win. For the employee, the employer, and traffic congestion!
Here's How It Works For Commuters:
- Your employer takes your commuting costs (up to $260 per month) out of your paycheck before figuring taxes. This lowers your taxable income, which puts more money back into your paycheck.
- You pay your approved commute expenses and submit a receipt to your employer for a tax-free reimbursement. It's that simple!
- Unlike a typical pre-tax "FLEX Plan", a qualified transportation benefit program is not a use-it-or-lose-it program. Monies that go unused in your account are automatically rolled over for future use.
- Your employer has to be the one to establish and administer the program. It's a great way for them to save money and offer a new employee benefit at no cost.
Here's How It Works For Employers:
- Your employer lets employees know the program is available and signs them up. If they already have pre-tax programs in place, they can set this employee benefit up the same way.
- When processing payroll, the employer proportionately reduces their FICA tax for each participating employee.
- When the employee submits their vanpool expenses to the employer for reimbursement, the employers processes the check according to the rules they have established for this benefit.
For detailed information regarding Commuter Tax Benefits, please review this summary table: