|
As transit
and parking expenses rise, one way employers and employees can
save money is with a commuter benefits plan. Because employee
contributions are pre-tax, they can save as much as 40% on their
parking or transit expenses and employers save on payroll taxes
(FICA, FUTA, workers' compensation, etc.). Employers generally
save from 8% to 10% for each dollar deducted pre-tax by employees.
In many cases,
the plan generates enough tax savings to cover all administrative
fees. See table below illustrating the Plan's tax savings.
|
SAVINGS
TABLE
|
|
Enrolled
Employees
|
Monthly
Average Commuting Expense
|
Employee
Annual Savings
[30%
Tax Bracket]
|
Employer
Annual Savings
[10%
Payroll Cost]
|
|
50
|
$80
|
$288
|
$4,800
|
|
100
|
$100
|
$360
|
$12,000
|
|
150
|
$125
|
$450
|
$22,500
|
|
200
|
$150
|
$540
|
$36,000
|
|
250
|
$175
|
$630
|
$52,500
|
Experience
Trust Administrators (TAI) was an early innovator of these plans
receiving IRS approval in 1999 for its "bona fide cash reimbursement"
method in compliance with IRS Notice 94-3.
Our written
testimony to the IRS in 1998 was instrumental in drafting the
proposed regulation released in January, 2000 and the final regulation
of January 11, 2001.
For more information
about pre-tax commuter benefits - see Overview
of Pre-Tax Commuter Benefits From 1998-2002.
Smart
Card Technology for Commuter and Flexible Benefit Plans
TAI is also a pioneer in the use of "smart" card technology
that works just like a credit card.
Employees
can use the Card to:
- Buy transit
tickets or pay parking expenses without filing claims
- Pay for
Health and Dependent Care expenses without filing claims
- Review
account activity online
Employers
can:
- Control
financial risk by not pre-paying expenses
- Customize
card usage - select from over 500 merchant codes
- Online
HR management for new participants, terminations, etc.
TAI's administrative
services makes for one easy, commuter and flexible benefits package.
For more information
about TAI's smart card - Click Here.
Easy
Administration With TAI's National Commuter Program
Whether it's TAI's "smart" card or "cash reimbursement"
method, we've simplified the administrative process by eliminating
multiple voucher providers or mailing regional transit tickets
to employees.
Those methods
are:
- Labor intensive
- Involve
old technology
- Inaccurate
because they cannot monitor usage
- More expensive
than TAI's service
- Requires
Employer to pre-pay expenses
- Does not
easily integrate with pre-tax parking or flexible spending accounts
TAI's
Flexible Reimbursement Methods
- Direct
Deposit
- Payroll
Integration
- National
Smart Card for Transit and Parking Expenses
- International
"Smart" Card for Health Care and Dependent Care FSAs
Contact
Trust Administrators
See for yourself how TAI can make a difference with hassle free
administration. Feel free to contact us by e-mail or call us toll-free.
Back
to top
|
