How Offering Commuter Benefits Can Save Your Company Money

The daily commute has never been a popular part of working life, but recent research puts it into stark perspective. Some 43% of remote employees are more afraid of commuting back to the office full-time than losing their romantic partner, including getting a divorce. 

That may seem harsh, but the costs and logistics of commuting are equally mindboggling in some locations. San Franciscans lose an average of $12,650.66 in wages per year on their annual commute, while New Yorkers waste 1 hour and 20 minutes daily on a round trip to the office at a cost of $41.66 per day. 

Employers who empathize with this expense and inconvenience can support their workers with a commuter benefits program. This guide explores how companies can benefit financially from this offering, and why it attracts employees. 

How do commuter benefits produce cost savings for your organization?

Although they require an initial investment, commuter benefits are a financially sound decision for employers. Here’s why: 

Commuter benefits create serious tax savings 

One of the most immediate ways that commuter benefits can save your organization money is by reducing your Federal Insurance Contributions Act (FICA) tax liability. FICA taxes include Social Security and Medicare taxes, which employers and employees each pay at a rate of 7.65% on wages. Employers can lower their payroll taxes by allowing employees to set aside pre-tax income for commuting expenses, which reduces their FICA tax burden.

The IRS allows employees to contribute up to $325 per month for transit benefits and an additional $325 per month for parking on a pre-tax basis in 2025. That’s a total of $7,800 per year per employee in eligible commuter expenses. Since these funds are not subject to FICA taxes, employers save 7.65% on the total pre-tax amount an employee sets aside.

Example: If an employee contributes $3,900 annually ($325/month for transit only), the employer saves $298.35 per year in FICA taxes. Or if an employee contributes the full $7,800 annually ($325 for both transit passes and parking expenses), the employer saves $597.70 per year in FICA taxes.

The commuter benefits cost saving adds up quickly when you stretch it across your entire workforce. For example, a company with 100 employees using a commuter benefits plan at the $3,900 annual level would save nearly $30,000 per year in FICA taxes.

Commuter benefits improve employee retention 

88% of organizations are concerned about employee retention, and for good reason. The average voluntary turnover rate in the U.S. sits at 13.5%, and many employees will look at factors like their commute, benefits, and quality of life as they decide whether to remain loyal to their employer or jump ship to a competitor. 

Research finds that those with longer commute times may be more likely to quit their roles. Lengthy commutes contribute to stress and reduce job attachment and embeddedness, making employees more likely to seek employment closer to home or with more flexible work arrangements.

While commuter benefits won’t reduce journey time, they can lessen the cost of those extra miles, which could be enough to ease turnover rates and save you significant recruiting costs. 

SHRM puts the average cost of replacing an employee at $4,700, but sources such as SHRM’s chair-elect Edie Goldberg suggest the real cost of turnover could be three to four times a person’s annual salary when accounting for hiring, training, and lost productivity.

Commuter benefits aren’t wasteful 

Understandably, companies don’t like wasting money on benefits that go unused. But commuter benefits are structured so employers can recoup costs if employees leave the company before spending their commuter allowance. Any unspent pre-tax commuter funds in their account are returned to the employer, which isn’t always the case with perks like gym memberships or types of wellness plans. 

Why do employees love commuter benefits?

Commuter benefits often have high participation rates as employees are keen to use their allowance to make immediate savings on their daily costs. Here are some of the top reasons employees enjoy the support offered by commuter benefits: 

Commuter benefits reduce financial stress 

Whether caused by inflation, the persistent increase in day-to-day expenses, or heightened economic uncertainty, 41% of Americans say they feel more stressed about their finances this year than in 2024. 

The cost of commuting is inextricably linked to this stress, with U.S. commuters currently experiencing an average annual wage loss of $5,748.05, or $22.11 per day. Commuter benefits can alleviate some of this financial stress by allowing employees to save on their pre-tax income. A reduction in their commuting costs can free up money for other essential expenses, like mortgage, rent, food, or utility bills. 

Commuter benefits support RTO models 

Return-to-office policies are extremely divisive, with employers like Amazon, Dell, and IBM insisting they’re essential for productivity. In contrast, many employees are reluctant to give up the flexible lifestyle they’ve enjoyed for the past few years and the affordability associated with working from home. 

According to a recent 2025 HealthEquity RTO and Commuter Insights study, 54% of workers say that commuting costs are the main obstacle to attending the office frequently. While return-to-office mandates aren’t the right solution for every company or employee, a commuter benefits offering could offset commuting costs for those required to return to a physical workplace. 

Commuter benefits demonstrate employee care 

At their core, commuter benefits are a strong signal that employers care about their employees and want to support them with the expense of attending a physical office location. 

This demonstration of empathy can be a powerful way to create employee loyalty and build a strong corporate culture. And when employees feel valued, they’re more likely to speak up about other needs that could help the business succeed. 

How to offer commuter benefits with Benepass

Benepass is a flexible, people-first platform that enables employers to offer commuter benefits as a pre- or post-tax benefit and ensure their employees’ pay goes further. Here’s how each approach works: 

Option 1: Pre-tax commuter benefits 

Employers set up their pre-tax spending account, which allows employees to set aside pre-tax dollars for qualified parking and mass transit expenses for their daily commutes. From here, employees can enroll in the program and elect their pre tax deductions during open enrollment.

While commuter benefits are often fully employee-funded, a growing number of employers are choosing to subsidize transit and parking accounts to help offset commuting costs and encourage participation. Our 2025 Benefits Benchmarking Guide found that 30% of companies offer a contribution, with the most common monthly contribution per employee being $100 but ranging from $50 to $325. 

Option 2: Post-tax commuter benefits 

While the IRS limits pre-tax benefits for commuters, companies have more scope and flexibility when offering their employees post-tax commuter benefits. For example, they might offer a monthly allowance that employees can use to cover their gas, tolls, car insurance, biking, ridesharing services, or any other aspect of the commute they need financial support with. 

17% of Benepass LSA customers currently offer commuter benefits on a post-tax benefit, with a median annual perk amount of $1,800. 

Learn more about how companies like yours structure their commuter benefits in our Benefits Benchmarking Guide, which includes detailed breakdowns by company size and industry. You can also learn more about our platform by booking a free demo or connecting with a benefits specialist at sales@getbenepass.com.