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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. See also current Comparison of Commuter Plans.
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 debit 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
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.
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