Some of the tax benefits for an employer are:

• The Federal tax code allows tax-free transportation fringe benefits of up to $105 per month per employee for transit or vanpool expenses and up to $205 per month for parking.
• The employer can cover the cost of the tax-free transportation fringe benefit, allow employees to reserve income on a pre-tax basis to cover the cost, or share the cost.
• Providing commuter tax benefits to employees can save payroll taxes for employers. The value of the benefit paid to employees is considered a tax-free transportation fringe benefit and not wage or salary compensation, therefore, payroll taxes do not apply. Giving an employee $105 in transit/vanpool benefits is thus less expensive for an employer than raising the employee's salary by $105. Allowing employees to reserve income on a pre-tax basis also saves the employer payroll taxes.
• Employees receive more from tax-free transportation fringe benefits than from a comparable salary increase since they do not pay federal income or payroll taxes on the value of the fringe benefit.
• Employers who reserve income on a pre-tax basis for a qualified transportation fringe benefit also save money since they do not pay federal income or payroll taxes on the income reserved.

For more information on tax benefits visit: www.bwc.gov