Employer Commute Services: ORCA passes for employees
ORCA Business Passport is a comprehensive, annual transportation program that is only available as an employer provided benefit.
Provides tax savings for both employer and employee
Companies and their employees can take advantage of tax-free and pre-tax commuter benefits.
Attracts and retains good employees
Adding transportation benefits enhances the company's overall benefits package. Transportation benefits cost less than other regular benefits but employees often use them more regularly, making them highly valued. Even if employees don't take advantage of these benefits, they remind employees that commute options are available. Given the cost of hiring and re-training even a single employee, this low-cost benefit could easily pay for itself as a factor in employee retention.
Reduces parking needs
Whether you pay for off-site employee parking or offer free parking, finite parking can limit company growth potential, use up customer parking space and add maintenance costs. Paying for outside parking is expensive for the company or the employee. Encouraging public transportation use can reduce these expenses.
Boosts wages by lowering transportation costs
Transportation benefits are a low-cost wage enhancement. Where wage increases are limited, transportation benefits effectively provide a monthly salary boost by reducing transportation costs through either a company subsidy or an employee-paid pre-tax option, or a combination.
Enhances company reputation
Traffic congestion, air pollution and environmental degradation are major topics of concern in our region. Companies that address these issues by providing commute benefits become known as leaders, good companies to work for, and good neighbors.
Lowers number of employees driving alone
If your company is one of the 600 companies in King County required by Washington State's Commute Trip Reduction law to reduce the drive-alone rate among your employees, offering bus passes at work can be a very effective element in your transportation program.
Years ago, a simple yet ingenious idea took root: By allowing workers to defray public transportation costs through their employers' benefits packages, we could reduce traffic congestion and improve air quality. In 1998, Congress amended the tax code to allow employees to take advantage of commuter benefit using their own pre-tax dollars.
Today, commuter benefits have joined health, retirement and disability at the top of the list of voluntary benefits offered to employees by their employers. In the new 2018 tax bill, transportation benefits are, in some cases, changed.
- Does Not touch section 132(f)—which is the section that deals with transportation fringe benefits—so there is no change on the individual side of commuter benefits
- The House bill does eliminate deductibility of subsidy programs. Said a different way, employers who
subsidize transit (or parking) can no longer write off those subsidizes for corporate tax purposes.
- However, the amount subsidized is still exempt for payroll tax purposes.
- For employers who provide a pre-tax program (a majority) there is no change. This represents a majority of transit benefit programs.
An employee may pay part of all of the cost of public transportation with pre-tax income via a payroll deduction; the employee can set aside up to $255 per month of pretax income during 2016 tax year. The employee saves federal withholding and FICA payroll taxes on the amount of deducted. The employer saves paying FICA on the amount deducted. Pre-tax payroll deductions are referenced in the Internal Revenue Code, Section 132(f) as amended by TEA-21, Title IX, Section 910.
Bicycle Benefits No Longer Allowed
Review the IRS' Employer Tax Guide to Fringe Benefits for more information.
- Technical support for existing ORCA business accounts
- Support for employers affected by CTR law at Commute Solutions