[Published Nov. 2018]

With the high cost of living in the Bay Area, one way to reduce the cost of commuting is to choose Pre-Tax Payroll Deduction for qualifying transportation expenses. Benefits-eligible employees can save up to 40 percent by purchasing parking permits, transit passes, transit parking (e.g., Caltrain and BART parking), and commuter checks using pre-tax dollars.

As of Jan. 1, 2019, the limit on the amount of pre-tax funds employees can use toward qualifying transportation expenses will increase from $260 per month in 2018 to $265 per month in 2019. This means an increase in pre-tax savings for employees who choose this option.

Limits on Pre-Tax Payroll Deduction for Transportation
  2018 Monthly Cap 2019 Monthly Cap

Eligible Transit and Vanpool Expenses

$260 $265

Qualified Commuter Parking

$260 $265

Combined parking and transit benefits

$520 $530

How Does It Work?

Federal and state law allows employees to pay certain transit, vanpool, and parking expenses with dollars that are exempt from income taxes and the Federal Insurance Contributions Act (Social Security and Medicare) withholding.

To participate, eligible Stanford employees can choose pre-tax payroll deduction when purchasing Stanford parking permits through Parking & Transportation Services’ online ordering portal.

Eligible employees who purchase transit passes (bus, ferry, train, trolley tickets and passes), and/or BART and Caltrain parking permits, can choose pre-tax payroll deduction when ordering through the Edenred Commuter Benefits Solutions portal.  

Are There Exclusions?

There are exclusions and restrictions governing pre-tax purchases. For example, eligible employees may use pre-tax purchases only for their own transportation costs to commute to and from work.

There are transportation expenses that are NOT eligible for pre-tax purchases, including tolls, taxis, gas/fuel, and parking fees at your home.

In addition, transit passes and or parking permits purchased through pre-tax payroll deduction cannot be refunded and may NOT be purchased for or transferred to other individuals.

To learn more, including eligibility, please visit our Pre-Tax Payroll Deduction program page.

Photo: Chris Gill

If you have questions about commuter pre-tax benefits, contact us at commuteclub@stanford.edu or 650.736.9923.