Employer Savings with Pre Tax Benefits

Companies and organizations can provide their employees with pre-tax transit benefits - these benfits can offset payroll taxes so employees can get to work easier while lowering their tax burden.

Employers can provide pre-tax dollars to help their employees get to work. Pre-tax benefits can be used for vanpools or other transit options while lowering payroll taxes.

Use our calculator to see what your savings could be!

Employee details
Salary
$-
Pre-Tax
Yearly
Pre Tax Transit Dollars
-
Transportation/Vanpool
Monthly
Employees
-
Full Time/Salaried
Total
State Taxes
-
Income Tax
Rate
Without Commuter Benefits
Gross Salary
-
Transportation Benefits
$0
Taxable Salary
-
Overall Payroll Taxes
-
With Pre-Tax Commuter Benefits
Gross Salary
-
Transportation Benefits
-
Taxable Salary
-
Overal Payroll Taxes
-
Estimated Savings
Per-Employee Savings
-
Total Savings
-

Transportation Benefits

Companies can offer up to $265 a month in pre-tax transportation benefits. Employees can use the pre-tax transporation compensation to pay for vanpools and otehr similar services. Employers benefit from paying a lower payroll tax for the reduced post-tax compensation. Employees get the transit benefits as well as paying less of their overall compensation to payroll taxes.

Taxable Income

Commuter benefits are a pre-tax fringe benefit so employers and employees can lower their tax burden by using pre-tax money for commuting with vanpools. Employees get paid the same gross salary but the commuter benefits lower the taxable salary which can help offset overall commuting costs.

Payroll Taxes

Typically employees and employers split state and federal payroll tax based on an employee's compensation. Payroll taxes are typically based on taxable salary and typically increase as compensation increases. States may have different tax rates and brackets than federal payroll taxes so make sure to include the appropriate state tax rate.

Taxes and Other Deductions

Employee tax rates vary based on marital status, additional deductions, and other tax benefits. Additionally full time, part time, and contract employees may see different tax burdens and benefits when electing pre-tax commuter benefits.

Government aid.

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