COMMUTER CHOICE

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COMMUTER CHOICE
Commuter Choice is a valuable addition to current
benefit packages. Unlike more traditional
employee benefits (e.g., health care or vacation
plans), employees can use Commuter Choice
benefits every day. Satisfaction is immediate,
and both the employer and employee start saving
right away.
Receive significant tax savings One significant
economic benefit of Commuter Choice is tax
savings. For example, suppose a business has
25,000 employees, and the business pays for 50
of each employee's transportation costs (390 per
year). The employees exchange 390 per year in
taxable compensation for tax-free transportation
benefits. The total paid by the employer, after
tax deductions, is 5.8 million. In addition, the
employer saves almost 1.0 million in payroll
taxes on the portion exchanged by employees. If a
company pays for the entire commute benefit, it
may deduct the amount of the benefit as a
business expense. For example, a business expense
of 19.5 million lowers corporate Federal taxes
by 6.63 million. Retain valued
employees Satisfied employees are more likely to
stay with your company, especially if the
benefits package is comprehensive. For instance,
if your company relocates, offering commute
benefits will help valued employees adjust to
their new commutes. You retain those valued
employees and avoid the cost of recruiting and
training new ones.
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Expand the labor pool and enhance recruitment
efforts Commuter Choice benefits keep you
competitive in your recruiting. In today's job
market, potential employees are interested in the
benefit packages offered by various
companies.Offering state of the art benefits
packages that include Commuter Choice programs
makes it easier to recruit the best talent for
your company. Reduce operating costs for
employee parking and relieve overcrowded offices
Options such as condensed workweeks and telework
opportunities create space in overcrowded offices
and save in capital and operating costs for
employee parking. Your organization can also
generate revenue by leasing the spaces to other
companies or by converting the land to additional
facilities or office buildings. And, more parking
is available for your customers. Improve
employee morale and productivity Traffic
congestion can take away valuable time from
employees' personal lives and add stress to their
daily routines. Providing commuting benefits
demonstrates your concern for your employees'
needs and boost morale. The benefit to you
employees who feel their employers consider their
needs are likely to be more motivated and
productive. Complement family-friendly
initiatives Today's employers recognize that
employees have to struggle to handle family and
work, and they are taking measures to improve the
overall quality of work/life for their employees.
A sick child or a doctor's appointment can cause
people to miss a day of work. Through options
such as telework or condensed workweeks,
employees are able to meet both their work and
family obligations.
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• BENEFITS
• With Commuter Choice,
• the business and the employee save taxes
• the business and employee can save other costs
• the employee receives a transit, vanpool and/or
  parking benefit
• Consider this example
• The Old Way
• ABC Company has decided to give its employees a
  raise of 780 for the year.
• Cost to business 840 (salary plus FICA)
• Salary increase for employee 455 (salary
  minus income and FICA taxes)
• The Commuter Choice Way
• ABC Company has decided to give a 780 Commuter
  Choice benefit instead.
• Cost to business 470 (salary plus FICA)
• Salary increase for employee 780 (salary
  minus income and FICA taxes)

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• HOW IT WORKS
• Employer-Paid Transportation Benefits. Employers
  can pay for their employees to commute by transit
  or vanpool, up to a limit of 105/month. With
  this arrangement, employees get up to 105 in a
  tax-free transportation benefit. Employers get a
  tax deduction for the expense and enjoy savings
  on payroll-related taxes.
• -OR-
• Employee-Paid, Pre-Tax Transportation Benefits.
  Employers can allow employees to set aside up to
  100/month of pre-tax income to pay for transit
  or vanpooling. Employers save money overall since
  the amount set aside is not subject to payroll
  taxes. Employees save money, too, since the
  amount of an employee's salary set aside for
  transportation benefits is not subject to income
  tax, up to the specified monthly limits.
• -OR-
• Shared-Cost Transportation Benefits. Employers
  can share the cost of transit or vanpool costs
  with employees-and everyone can receive valuable
  tax savings. With this approach, employers can
  provide a portion of the cost of taking transit
  or vanpooling as a tax-free benefit and allow the
  employee to set aside pre-tax income to pay for
  the remaining amount of the benefit (up to the
  specified limits).
• -OR-
• Parking Cash-Out. Employers can offer their
  employees the option to "cash out" of their
  existing parking space.