Employers and employees receive tax savings because the benefits are paid with pre-tax dollars, up to $130 per month.
Annual Transit Deduction
Federal Income Tax Saves
Employee FICA 7.65% Saved
Alaska State Income Tax
Total cost for $1500 in transit
Total Savings to Employee
Employee’s Pre-Tax Salary Deduction
Actual Cost to Employer
Employer FICA 7.65% Saved
Employer Unemployment Tax Saved
Net Savings to Employer
*Assumes employee pays 28% in federal income tax, no state income tax and 7.65% FICA and sets aside the maximum ($1,500.00 or $125/month) and assumes employer pays 7.65% FICA and 0.8% FUTA tax.