Commuter Benefits Pre-Tax Savings Calculator

IRS Section 132(f) commuter benefits let employees set aside up to $315/month for transit and $315/month for qualified parking on a pre-tax basis in 2026. For someone in a 24% federal bracket plus 6% state plus 7.65% FICA, that’s roughly $1,400-$2,800 in annual tax savings depending on commute cost. The program is voluntary — your employer must set it up, but most major payroll providers (ADP, WageWorks, HealthEquity) offer turnkey administration.

How Section 132(f) Works

You elect a pre-tax payroll deduction each month, capped at $315 for transit/vanpool and a separate $315 for parking in 2026 (both limits indexed annually). The deduction reduces your federal income tax, state income tax (in most states), and FICA tax (7.65%). Your employer also saves 7.65% FICA on the same amount, which is why some employers offer a partial subsidy. Unused balances roll over month to month indefinitely — there’s no use-it-or-lose-it rule. If you change employers, you forfeit any unused balance, so spend it before leaving.

Why Employers Quietly Offer This

Commuter benefits have lower uptake than HSAs or 401(k) because most employees never hear about them. Employers benefit too — they save matching 7.65% FICA on every dollar deducted, which makes the program net-positive to administer. If your employer doesn’t offer this, ask HR directly: setup through WageWorks or HealthEquity takes ~2 weeks and costs the employer roughly $4-8 per enrolled employee per month, easily covered by the FICA savings. NYC, San Francisco, Seattle, DC, and Berkeley actually require employers above certain size to offer this — verify your local mandate.

Last updated May 2026. Sources: IRS Publication 15-B (Fringe Benefits).