Commuter Choice is a win-win situation

• It offers a tax break. Employees and employers both are exempt from any taxes on Commuter Choice benefits. Plus, the benefits are tax deductible for the employer.
• It's good for business. As a tool for recruiting and retaining employees, Commuter Choice offers benefits that are valuable and easy to understand. Plus, easing the stress of commuting has been shown to boost employee morale and reduce absenteeism.
• It's good for the environment. Commuter Choice reduces the number of single occupant vehicles on the road, easing traffic congestion and the pollution it causes. It's a program the federal government often holds up as an example of good corporate citizenship.
• It's good for our quality of life. Traffic congestion is frustrating and stressful. Public transportation and vanpooling help employees regain peace of mind and productive time lost when they have to attend to stop and go traffic.
• It saves money. In addition to the tax relief, Commuter Choice participants also save money on gas and by reducing wear and tear on their vehicles.

Here's how it works

If an employer were to offer a $100 per month raise, a significant portion of the raise would go towards taxes-not to the employee. However, if a company offers to pay up to $100 per month for commuting by public transit or van pool, then the employee gets the entire benefit AND a more relaxing commute! Neither the employee nor the employer pays taxes on that benefit. Employers have the discretion to offer the benefits to any group or groups of employees and to offer any amount, up to $100 per month.

There are several ways to structure a Commuter Choice program:

• Employer-paid Benefit Option - Up to $100 per month for transit and vanpool expenses is offered tax-free to employees and does not incur payroll taxes for the employer or employee.
• Employee-paid Pre-tax Benefit Option - Employees may have up to $100 per month taken out of their current monthly pay towards the cost of commuting on transit or in vanpools before taxes are applied. Employees save federal income and payroll taxes. Many employers prefer this option because the employee pays the cost, and the employer saves money because FICA and unemployment taxes do not apply.
• Fare Share Benefit Option - Under this option, the employer and employee each pay a share. The employer, for example, might offer $20 per month in transit/vanpool benefits and allow the employee to reserve up to $80 per month as a pre-tax benefit (total tax-free benefit maximum remains $100 per month).

How can Commuter Choice benefit your company?

• Larger Labor Pool - Potential employees may not have access to a car to commute. Or they might not want to drive to your worksite in heavy traffic, getting frustrated and adding wear and tear to their vehicles. Offering them the option of a simple and relaxing commute-paid for by the company-is much more attractive.
• Increased Productivity - Your employees will arrive on time, relaxed and ready to start the day. They won't be distracted and frustrated by traffic congestion and road rage.
• Tax Savings - Both employers and employees save federal and state income and payroll taxes. Your net payout will be reduced for FICA, federal unemployment tax, and federal income tax. If you cover the full cost of the transit benefit, you can also deduct the cost from your business income taxes.
• Competitive Edge - The workplace has been redefined in the last few decades to focus on benefits packages. This tax-free benefit is an excellent tool in recruiting the best and brightest to your company and retaining loyal employees.

What's the next step?

Contact us at RideShare.