Commuter benefits are employer-sponsored benefits that help you save money on your commute to work. They can be structured as either a pre tax benefit account or a post tax stipend or perk. Pre-tax commuter benefit accounts are accounts into which employees deposit money pre-tax to pay for commuting expenses like mass transit fares, parking near the office and carpooling expenses. Post-tax commuter stipends and perks can be used to pay for expenses like bike repair, maintenance on the employees’ personal cars, gas, rideshare services and more. You pay income taxes on the value of the post-tax commuter benefits you receive.
Commuter eligibility requirements
- You must access these benefits through your employer.
- You must work enough hours to be considered a “covered employee” at your company.
- Remote workers can qualify to reimburse for commuting expenses if you take approved transportation to a coworking office space.
- Commuter benefits are compatible with any health plan and other pre- and post-tax benefits.
Where are commuter benefits required?
Employers with 50 or more covered employees, located in one of these cities or states, are required to offer their employees some form of commuter benefit. Berkeley requires companies with 10 or more employees to offer commuting benefits.
Contribution limits and eligible expenses
2024 commuter contribution limits
In 2024, employees can contribute up to $315 per month into their pre tax accounts.
Post tax perks or stipends don’t have an IRS-imposed limit.
Pre-tax eligible expenses
Pre tax commuter benefits can be used for the following expenses:
- Mass transit fares like bus, train, subway, ferries, water taxi, and light rail.
- Carpooling expenses.
- Parking near the office or mass transit center.
Post-tax eligible expenses
Post tax commuter benefits can be used for the following expenses, which can be further customized by the employers:
- Parking
- Rideshare services
- Gas for personal car
- Mileage reimbursements for personal car
- Company car
- Personal car maintenance
- Bike maintenance
- Tolls
- Car insurance
- Bike share
- Hybrid charging stations
Lively's Commuter benefits guide
This comprehensive guide covers pre- and post-tax commuter benefits.
