What are the tax advantages of offering commuter benefits?

Employers can save on their payroll taxes by providing their employees with pre-tax commuter benefits.

  • Commuter benefits are considered qualified transportation tax-free fringe benefits, and are not subject to employee income or employer payroll taxes. 
  • Commuter benefits are also a cost-effective way to attract and keep talent.  For example, the cost of offering an employee $260  in transit benefits is less than the combined cost of increasing the employee’s salary by $260  and paying the additional payroll tax. 

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