Entry level workers, who spend the greatest percentage of their salary getting to and from work, will see their take home pay increase, after taxes. Other employees can save or even make more money, simply by getting out of their solo driving routine and using Commuter Choice options. Commuter Choice is good for the environment. Reducing the number of vehicle miles traveled can reduce the volume of greenhouse gas emissions that we put into the atmosphere. The reduction in ozone producing emissions can improve health conditions for those prone to asthma and other respiratory ailments.
Employers sponsor commuting cost as a fringe benefit at no cost to the employee.
The employer can take a federal tax deduction on contributions up to this amount. Commuting costs are applicable to transit passes, vouchers, tokens or other valid non-cash instruments that are accepted as payment by public and private transportation services with the exception of private taxi service. Employers may allow employees to use pre-tax income to purchase a transit pass or voucher. Employees pay no federal or FICA tax, and depending on the state, those taxes are not calculated. Employers pay no FICA on this amount.