This plan allows employees to pay workplace commuting and parking expenses on a pre-tax basis which reduces taxes and increases take-home pay. Employers benefit because they do not have to pay social security taxes on the commuting and parking expenses covered under the plan.
The plan allows employees to claim expenses for mass transportation in a commuter highway vehicle as long as the travel is between the employee’s residence and place of employment. Expenses for mass transit such as bus, ferry, train, etc. are also covered under the plan.
Lastly, employees can also claim expenses for parking at the employer’s workplace.