Employers save payroll taxes on the amount employees set aside. A combination of both. Return to Top. Companies have the opportunity to choose to offer these benefits. Employers can provide one kind of benefit or all types of transportation fringes, at their discretion.
Employees can take advantage of the plan only if their employer participates.
Only employees who pay for transportation expenses through payroll deduction qualify for pre-tax benefits. If a company offers a transit or parking benefit in addition to compensation, employees will save the cost of the transit or the parking up to the established limits. They also will not have to pay federal and state payroll taxes or FICA on the amount you give them, if you subsidize within the established limits. If a company offers a transit or parking benefit in lieu of compensation, employees will save the federal taxes and FICA on the amount they spend on transit or parking, within the established limits. If a company offers a transit or parking benefit in addition to compensation, they can write off the subsidy, including administrative fees, as a business expense.