How to Leverage Commuter Benefits to Boost Employee Satisfaction

What are Commuter Benefits?

Commuter benefits, often known as transportation or transit benefits, are offered by employers to alleviate the cost and stress of commuting to work. These benefits can be part of a comprehensive employee compensation package. Examples include reimbursements or subsidies for public transportation, cycling-related expenses, and carpooling or vanpooling services. Some organizations even offer parking benefits at or near the workplace, which is particularly valuable in urban areas where parking can be expensive.

How do Commuter Benefits Work? 

The structure of commuter benefits can vary widely depending on the organization and its specific needs. Some employers may provide a fixed monthly allowance to cover commuting costs, while others may offer benefits in kind, such as shuttle services or company-provided bicycles. There may also be tax incentives available for employers, which is another positive reason to provide these benefits to your employees.

Pre-tax Benefits

One of the most significant advantages of commuter benefits is they are typically pre-tax. According to the IRS, employers can allow employees to use pre-tax dollars to pay for qualified transportation costs. This means that these costs can be deducted from an employee's gross income before taxes are calculated, effectively reducing their taxable income.

As a result, both employees and employers can save on taxes. For the employees, the more they spend on commuting, the more they can deduct from their taxable income, leading to substantial savings. For employers, providing pre-tax commuter benefits can lead to payroll tax savings.

The Perks of Commuter Benefits

Cost savings aren’t the only potential boon of commuter benefits. Depending on their structure, such programs can also:

1. Provide flexibility to the employees who may now have more options for how to get to work. 
2. Encourage employees to carpool or take the train with coworkers. This gives them a chance to bond and enjoy the company on an otherwise long and boring ride to work.
3. Further corporate environmental commitments by making incentivizing lower-carbon transit options, such as providing public transportation subsidies.
4. Improve employee health by making it easier to opt for an active commute, like purchasing bicycles for staffers.

Implementing Commuter Benefits in Your HR Strategy

Incorporating commuter benefits into your HR strategy requires strategic thinking and careful planning. Here are a few steps you can take to set yourself up for success.

1. Evaluate Commuting Needs

Start by assessing the commuting patterns and needs of your employees. Understand what modes of transportation are most commonly used and what challenges employees face.

2. Align with Organizational Goals

Ensure that your commuter benefits program aligns with your company's broader goals and culture. For example, you can consider focusing on promoting eco-friendly commuting options as part of your broader CSR strategy.

3. Budget Consideration

Determine your budget for the program. In this calculator, remember to factor in how commuter benefits also generate savings through enhanced employee satisfaction and reduced turnover.

4. Research Legal and Tax Implications

Consult with a legal or tax expert to ensure compliance with all relevant regulations, and how to maximize the program structure to maximize possible tax implications.

5. Plan Logistics

Program logistics include deciding which transportation options and vendors to work with and negotiating their contracts. This might include deciding whether to offer pre-tax benefits, reimbursements, or company-provided transportation services. You’ll also need to set up user-friendly platforms for enrollment, tracking, and reimbursement plans. 

6. Communicate With Employees

Develop a communication strategy to inform employees about the program. Consider using various communication channels to ensure your message reaches everyone.

7. Monitor and Evaluate

Regularly monitor and evaluate the effectiveness of your program. You can use employee feedback and participation rates as key performance indicators. Making necessary adjustments helps the program continue to meet employee needs and organizational goals.

Real-World Commuter Benefits Programs

Across industries, organizations of different sizes are leveraging commuter benefits. The following examples can provide inspiration and practical know-how for organizations considering implementing their own.

1. Microsoft's Connector Bus: Microsoft operates a shuttle service known as the Connector Bus, which serves employees in several major residential areas.
2. Patagonia's Drive-Less Program: Outdoor clothing company Patagonia offers cash incentives for employees who choose to walk, bike, carpool, or use public transportation for their commute.
3. Clif Bar's Cool Commute Program: Clif Bar & Company offers financial incentives to employees who purchase clean, fuel-efficient cars or bikes, encouraging a lower carbon footprint.
4. Genentech's gRide Program: Bio-technology firm Genentech operates a comprehensive commuter benefits program that includes carpools, vanpools, shuttles, and subsidies for public transit and bicycling.

Benefits That Woo Your Workforce

Commuter benefits are just one benefit HR departments can use to  boost employee morale and satisfaction. One of the most powerful tools available to HR departments is an employee wellbeing program: There’s a reason 100% of HR leaders say wellness programs are important to employee satisfaction.

A wellbeing program can include benefits like gym memberships, app subscriptions, and mental wellness support. It can also involve providing or subsidizing healthy snacks, organizing educational events on wellness topics, and offering flexible work schedules for work-life wellness. By taking a holistic approach to employee wellbeing — from communing to nutrition — employers can create a workplace environment that is conducive to both productivity and personal growth. 

Take the first step in boosting employee satisfaction — reach out to a Wellbeing Specialist!