Employers boosting benefits that offset commuting costs

Times Staff Writer

High cost of gasoline getting you down? Your employer may be willing to help.

“Companies are embracing techniques to reduce commuting time and expense,” said Mitch Barnes, principal at Mercer, a New York-based benefits consulting firm. “It used to be that they did this to balance work-life issues. Now it’s becoming more of an employee-driven economic issue.”

As gasoline prices soared into record territory this year, many companies began adjusting benefit programs and workplace policies to provide at least some relief, according to a recently released Mercer survey of more than 300 major employers.

Some of the changes are designed to make it cheaper to commute to work or to drive your car for business purposes. For example, 70% of companies have hiked their mileage reimbursement rates for employees who use their cars on the job. An additional 6% say they plan to do so in the next six months.


In addition, some employers are adding commuting subsidies, which offset the cost of either public transit or parking, or are organizing ride-sharing or carpooling programs.

Other changes may allow you to drive to work or other locations less often. For example, most companies are shifting, or plan to shift, some in-person meetings to audio or video conferences.

There’s also a growing willingness by employers to let you work from home or work just four days a week.

Indeed, even Barnes said he was surprised by his employer’s willingness to pay for transit passes and carpooling.

“I didn’t know the extent to which we covered the cost,” he said. “I thought we might provide a service to purchase the cards; I didn’t realize that we paid for them completely.”

In fact, of all employee benefits, commuting subsidies are the least understood, said Dan Corbett, director of transportation benefits at WageWorks, a San Mateo company that administers company benefit plans.


But the value to you of those benefits can add up to hundreds or even thousands of dollars a year.

Commuting benefits can be provided in two ways. With the first, the company pays the employee’s public transit or parking expenses up to a set amount each month. The worker pays nothing and the benefit isn’t taxable.

With the second, employers allow workers to divert a portion of their pretax pay into an account that can be used to pay for transit or parking. It’s similar to pretax accounts you can set up for healthcare and dependent-care expenses. Although you’re spending your own money, using such accounts reduces how much you pay in income and payroll (Social Security and Medicare) taxes.

Whichever way it’s done, these commuting benefits can be used to pay as much as $115 a month for public transit and as much as $220 a month for parking. And if you pay to park your car at a remote location and then take a train or bus to work, you can use both benefits.

As for other options, such as the ability to telecommute, you might not even know what’s available. And your eligibility might depend on the type of job you have. So if you’re interested, ask your supervisor or human resources department.

It can pay off. Working from home -- even just a couple of days a week -- can save you plenty on gasoline, parking and possibly even auto insurance.


“Employees need to be proactive,” Barnes said.


Kathy M. Kristof welcomes your comments but regrets that she cannot respond to every question. Write to For past Personal Finance columns, visit