A Pain Free Way to Slash Company Payroll Taxes

It is rare that a business owner comes across an employee perk that saves the employee and the company money. But just such a perk is available in the form of TransitChek vouchers and MetroCards that let your employees save money on their daily trek to your company while you save money by reducing your payroll taxes.

Administered through the not-for-profit TransitCenter, TransitChek lets employees set up to $100 before taxes to pay for their mass transit expenses. On a yearly basis, the employee can shelter up to $1,200 from taxes resulting in a $300-400+ savings for the employee in commuting costs each year.

Saving your employees some dough is nice, but what about your bottom line? Companies that allow employees to set aside a portion of their pre-tax salary to pay for commuting costs save money by reducing their overall payroll taxes since the employee’s taxable income is reduced.  In many cases, the TransitChek Program can save employers thousands of dollars a year in taxes, which is not a bad result from an employee benefit. 

In short, TransitChek is a win-win program both for you and your employees and the proof is in the money that it has allowed companies and employees to save;  TransitCenter estimates TransitChek has saved companies over $35 million in payroll taxes and saved the 500,000+ employees who have used the program more than $110 million collectively. 

Tax Cutting Solution for Small to Mid-Sized Companies

TransitChek is used by thousands of companies in the New York City metro area and it enables companies to offer pre-tax products such as TransitChek Vouchers and TransitChek MetroCards which employees can use to pay for their commute on virtually every form of public transportation available in the tri-state area from MTA subways and buses to the LIRR, NJ Transit, MetroNorth, PATH trains, Triboro Coach buses and many, many more (for a complete listing, click here ).

Aside from deducting TransitChek costs from the employee’s pre-tax pay, you can pay for TransitChek outright and use it to meet various needs, for example, as a bonus, for relocation expenses, as part of a salary increase, or as just a fringe benefit for select employees. 

The following examples show how an employee and your company can save with TransitChek. With TransitChek, the savings both for the employee and your company can be quite significant as illustrated below:

Guaranteed Savings for Employees
Who Commute By Mass Transit

            TransitChek Guarantees Substantial Returns on Investment for Companies

Getting Started
Considering that TransitChek is so easy to use by both the employer and the employees, it might almost seem like it is too easy. But it is fairly straightforward; the biggest amount of work is filling out the order form.

It’s up to the employees to decide how much they want to have deducted from their pre-tax pay (the maximum is $100 per month). The money you deduct from their paychecks is used to purchase the TransitChek vouchers, cards, or both. However, if you are using the program as a bonus or as an incentive program, then you would pick up the tab and payroll deductions never enter into the picture. The vouchers and MetroCards come in denominations of $50, $35, $30, and $15. Once you’ve decided how many of each you need, tally it up, add in 4% of the total which is the TransitCenter fee (you are guaranteed to save more through the reduction in payroll taxes), and send in payment.