According to a recent article featured on CNN Money, commuters in the United States spend an average of $2,600 annually on their daily commute. This comes out to about $10 per day getting to and from the work place. Furthermore, 60% of survey respondents reported an increase in their commuting costs as compared to 19% who reported a decrease.
While gas prices are relatively low, at about $2.30 per gallon today as compared to $3.18 a year ago, 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.
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; tax payers are not permitted to submit commuter expenses as part of their personal income tax write-offs.
When it comes to commuter benefit plans, there are a couple of options available.
One way is for employers 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:
- Transit and Vanpool – $130/month
- Parking – $250/month
- Biking – $20/month
Since employees are looking to make their dollars go farther, 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.