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(NYC) Transit Ordinance

In 2014, the New York City Transit Ordinance, Local Law 53, was signed into Law.  Any company in New York City, (located in the 5 boroughs), that has 20 or more full-time employees must offer a pre-tax transit commuter benefit program to their employees or they will face penalties.  This new law will go into effect on January 1, 2016; companies still have time to update their programs.  Companies that are not compliant will be subject to civil penalty.

What does that mean for Employers and Employees?  That means savings for all!  Employees can use pre-tax benefits of up to $130.00 a month for transit and up to $250.00 a month for qualified parking to pay for all, or a portion, of their commute to work.  Employers can save up to $350.00 per year in payroll taxes for each employee who takes full advantage of the program.  That’s a win for everyone!

Commuting costs are on the rise and increasingly take up a larger portion of employee earnings.  On average, commuters spend about 18% of their income on transportation costs, an increase of 8.5% on average.

Since pre-tax commuter benefits reduce an employee’s taxable income, by offering these benefits to their employees, companies can increase the effective compensation realized by employees while reducing company payroll taxes.

For more information or questions contact Phil Tesoriero at (212) 244-1303.

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