Make Employees Happier About Their Commute

    Posted by TASC Large Markets on Jan 28, 2020 12:46:53 PM

    Improved commutes for employees lifts overall workplace satisfaction.


    By making it less expensive for employees to commute, you can make commuting a little less stressful. That, in turn, can help with recruiting and retention, especially if your company is located in urban areas where traffic is heavy and parking can cost several hundred dollars a month.

    Let’s look at the two main categories of commuters and how benefits can address their needs.

    A Benefit for Drivers

    More than 76% of Americans drive to work every day.1 While you can’t control the stresses and challenges of heavy traffic, road construction, weather-related delays and hazards, etc. you can take  some of the stress out of parking expenses. In New York, the average car owner paid over $5,000 a year in parking fees in 2017.2 Nationally, traffic and parking fees account for an average 45% of the total cost of vehicle ownership.3 But a provision of the Transportation Equity Act (IRS Section 132) allows employees to contribute up to $265 per month in pretax dollars to an employer-sponsored parking account. Using the average American tax rate (just under 30%), an employee would save more than $900 in taxes for the year.4 We’ll talk more about how to offer that benefit below.

    A Benefit for Mass Transit Passengers

    Today, approximately 7.6 million workers commute by public transportation.5 In addition to helping ease road congestion, public transportation in the U.S. saves 4.2 billion gallons of gasoline annually.6 Environmentally speaking, buses produce significantly less air pollution per passenger than an automobile with a driver and no passengers.7 Your company can do its part in reducing oil consumption and emissions by implementing a transit benefit that cuts commuting expenses for employees who travel by bus, subway, light rail, etc. Just as in the case of parking, IRS Section 132 allows you to offer employees the opportunity to contribute up to $265 per month pretax and save more than $900 in taxes.

    Payroll Tax Savings for Your Company

    In addition to helping you attract and retain employees, parking and mass transit benefits can save your company money, since the dollars employees contribute on a pretax basis reduce the amount of your taxable payroll.  This can mean a payroll tax savings of up to 7.65% on average.8

    Remember: Different Generations Commute Differently

    Whether you offer a parking benefit, a transit benefit, or both, depends in part on where your company is located and the commuting and parking challenges facing your workforce as a whole. Another factor to keep in mind is the generational divide over commuting preferences. As a group, Baby Boomers have a strong preference for commuting by car versus taking public transportation, so they’re prime candidates for a parking benefit. Millennials are nearly the opposite. Whether it’s because they grew up with the “sharing” economy or because they feel strongly about the environmental damage done by automobiles, fewer of them are buying cars. And while two-thirds of Baby Boomers said having a car was valuable to them (worth more than the cost of maintenance), only about half of Millennials said having a car was worth the cost of keeping it up.9 For this reason among others, Millennials are flocking to cities and towns where mass transit is available—and they are counting on mass transit to take them to their jobs. Offering them a mass transit benefit could help separate your company from others they’re considering. 

    How to Create a Parking or Transit Account

    If you don’t yet offer these benefits, a good first step is to gauge the demand by researching current commuting habits in your company and surveying possible alternatives. Once you have determined a need, the next step is to create a Transit/Parking Flexible Spending Account (FSA). According to IRS rules, a benefits debit card is required to pay for all public transportation. You can set up and administer these accounts yourself or work with a third-party provider like TASC to handle them for you.


    It makes sense that when employees feel a little better about their commute, their overall workplace satisfaction will improve.  But what you might not realize is that failing to address commuting challenges can cost you quality personnel. A recent survey found that 23% of workers quit a job because of a bad commute.10 (That number goes up to 34% for those between the ages of 18 and 34.11) In a healthy job market, offering a parking or transit account is much more than a nice perk. It can be an essential tool for recruiting good people and keeping them from leaving.




    1. “America’s commuting choices: 5 major takeaways….,” Brookings Institute, October 2017:


      “U.S. Drivers Spend Exorbitant Amounts on Parking….,”, April 2018:

    3. Ibid.

    4. TASC STAT

    5. “2019 Public Transportation Fact Book,” American Public Transportation Association, 2019:

    6. “Public Transportation Benefits,” American Public Transportation Association, 2019:

    7. “Nine Benefits of Public Transportation,” National Express Transit, July 2017:

    8.  “How Pre-Tax Commuter Benefits Work,” Edenred, February, 2018:

    9. “Millennials Unhappily Stuck in Their Parents’ Transportation System,” Streetsblog USA, Nov 2018:

    10. “23% of workers have quit a job because of this….,” CNBC, December 2018:

    11. Ibid.