The cost of work travel for commuters is high and hits them in time and in their wallets. According to Business Insider in 2019, workers spent between $2,000 and $5,000 annually on transportation. And as far as time spent, the U.S. Census Bureau calculated the average one-way commute went up to almost 30 minutes in 2019.
Gas prices are averaging about $3.18 per gallon, and commuters have to factor in parking fees, taxi fares, or mass transit fees for buses, subways, or trains. Biking expenses can also be a factor.
In short, commuting is costly.
Taxpayers are not permitted to submit commuter expenses as part of their personal income tax write-offs. And the high cost of traveling back and forth to work every day has commuters looking for relief. Thankfully, the IRS acknowledges this burden on the workforce and has established a way for employees to get some help. However, the one caveat is that a commuter benefit plan must be offered by the workers’ employer.
When it comes to commuter benefit plans, there are a couple of options available.
One way is for employers to offset high commuter costs is to offer pre-paid transit passes to their workforce. These passes can be used on public or privately-owned mass transit systems, or for a business that transports people, like a vanpool. The bonus for employers is that they can save on payroll taxes because it does not count toward the employee’s gross income.
Another method for employers is to offer a reimbursement plan, which allows employees to set aside tax-free deductions from their paychecks and get reimbursed for qualified expenses. The monthly maximum reimbursements for varying transportation methods are:
Since employees are looking to make their dollars go farther to offset the high cost of commuting, they should check to see if their company offers a commuter benefits package. Transit plans can be a low cost solution to attracting and retaining top talent within a company’s workforce.
DataPath’s Summit platform can be a part of any employer’s benefits package, and it offers a variety of options:
- Parking Expenses Conversion
- Parking Expenses Reimbursement
- Transit Pass and Vanpooling Expenses Conversion
- Transit Pass and Vanpooling Expenses Reimbursement
With an integrated, secure online claims entry system, state-of-the-art mobile app, and convenient debit card, Summit is a comprehensive benefit solution with modern amenities.