Do you have employees that have to pay for parking or a bus or transit pass to get to work? You can give both the employee and your business a raise by using the Transportation Fringe Benefit. If you pay directly or reimburse the employee the cost of:
*Qualified parking
*Transit passes
*Certain commuter transportation costs
*Bicycle commuting
You can pay up to $230 a month in qualified parking, transit passes and certain commuter transportion costs and up to $20 a month in bicycle commuting. You pay the benefits, reduce your employers salary by the cost and both your business and the employee save on payroll taxes (the employee saves fed withholding, FICA, Medicare, state withholding and SDI and business saves FICA and Medicare), If you have a C Corporation, you can also benefit as an employee (this doesn’t apply to S-Corps, Partnerships, LLCs and Sole Proprietors).
The employee has to elect to make the salary reduction in writing and the election must include:
*Date of Election
*The amount of compensation deduction
*The time period the reduction will take place (the employee can elect to automatically renew the election).
How about that – transportation that saves you money.