Commuter Choice PPT

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COMMUTER CHOICE 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. 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.


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.


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)


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.

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