Commuter Benefits and Bay Area Compliance

The average Bay Area commuter spent 83 hours in traffic in 2016 according to a recent study by Inrix – a roadway analytics firm.

The Bay Area ranks third on the list of American cities with the worst traffic. (Los Angeles still holds the honor of number one with commuters averaging 104 hours annually).

To help combat traffic conditions, the Bay Area and several other cities have implemented Commuter Benefit Ordinances.

The goals of these ordinances are to lower the amount of single occupancy vehicles from the busy roads as well as help reduce the emissions of greenhouse gases. Although these programs are mandatory for employers to implement for their employees, employers can equally benefit from them because of the potential tax-savings.

Below is a list of cities with their own Commuter Benefit Ordinance:

  • San Francisco
    • Who must comply
      • Employers with 20 or more employees who each work at least 20 hours
      • Employers at the San Francisco Airport
  • Berkeley
    • Who must comply
      • Employers with 10 or more employees who each work at least 10 hours per week
  • Richmond
    • Who must comply
      • Employers with 10 or more employees who each work at least 10 hours per week

Employers with 50 or more full-time employees in the following counties must comply with the Bay Area Commuter Benefits Program (law SB 1128):

  • Alameda
  • Contra Costa
  • Napa
  • Solano
  • Sonoma
  • Marin
  • Santa Clara
  • San Mateo
  • San Francisco

 Please note: Each of the above ordinances requires registration with their city/program. Any employer with 50 or more employees is subject to the Bay Area Commuter Ordinance only.

Employers may choose from the following Commuter Benefit options:

  1. Pre-tax Benefit Your employees can place up to $255 per month of pre-tax funds into a commuter account for transit and vanpool expenses
    • Potential tax savings
      • Employers can save up to $238 per year per employee (depending on employee’s monthly contribution)
      • Employees can save up to $964 per year (depending on their tax bracket)
  2. Employer Paid Benefit A monthly subsidy for transit or vanpool expenses
    • Potential tax savings
      • Employers do not pay payroll taxes on the subsidy and may deduct the subsidy as a business expense
      • Employees do not have to pay taxes on the subsidy
  3. Employer Provided Transportation A company funded bus or van service to and from the workplace
    • Potential tax savings
      • Employer may be able to deduct the cost of their provided transportation as a business expense
  4. Alternative Commuter Benefits Employers may choose a different option if it is effective in lowering the amount of single occupancy vehicles
    • This option is specific to the Bay Area Commuter Benefits Program. Although similar, the other city ordinances each have a fourth option that varies

Even though these programs are mandatory for specific employers, any employer can benefit from offering these plans.

Please fill out the form below to get more information on commuter benefit options.

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