Although pre-tax employee commuter benefits sound like they only assist your staff, the truth is that these programs also provide significant advantages for your business, as well. A Commuter Benefit Plan (CBP) helps your employees save money by providing tax breaks for using public transit to and from work, vanpools or parking near your company.
The federal government allows businesses to withhold up to:
- $300 per month for commuting (pre-tax)
- $300 per month for parking (pre-tax)
- $20 per month for biking-related expenses (after tax)
Offering employees pre-tax commuter benefits also lets employers save money too.
Consider these great advantages your business can enjoy by offering pre-tax commuter benefits:
1. Save your business money!
Not only do the employees save money, but your business also reaps financial benefits. Employers are responsible for payroll taxes around 7.65 percent, which means when employees use the $300 per month, the savings add up by the end of the year.
Providing employees with commuter benefits that are easy to use, with user-friendly web portals, will further boost participation. The more employees that take advantage of your Commuter Benefit Plan, the more savings your company will see. The extra savings can go towards enhancing employee benefits, some office improvements or any number of things.
2. Stay compliant with local ordinances
Some metro spots, such as New York City, Washington D.C., several cities around the San Francisco Bay Area, and most recently Philadelphia have already passed local ordinances requiring businesses with a set number of employees to offer pre-tax commuter benefits. For certain size companies, having just one employee in a specific location could make you subject to an ordinance. Additionally, with the success of these programs, there’s a high probability that other metro areas will soon follow suit and pass similar ordinances. If you’re operating in a city where commuter benefits are not yet required but where there is an incentive to increase the use of mass transit, you should consider getting a jumpstart by looking into different programs. One of the benefits of partnering with someone like Benefit Resource is that you can implement a program once and be compliant across different metropolitan areas.
3. Attract better talent
With unemployment hovering under 5 percent, companies seeking to hire new candidates face a competitive landscape of organizations vying for top talent. One way to make your company more attractive for highly qualified candidates is by offering pre-tax commuter benefits. The additional benefits may serve as the tiebreaker for a job seeker comparing two positions at different companies. Including this perk on a job posting can really make your business stand out on the employment listings, and can help the company excel by bringing in better candidates.
4. It’s good for the environment
Not only are pre-tax commuter benefits a win-win for both employees and companies, but they’re also a major win for the environment. By offering employees the incentive to use public transportation or vanpools and save money, these plans take cars off the road. With fewer automobiles releasing polluting emissions, you can help reduce the carbon footprint. While this might not lead to an immediate, tangible advantage for the business, you can sleep soundly with the knowledge that you and your employees are doing your part to protect the environment.
Click here to learn more about Benefit Resource’s Commuter Benefit Plans.