IRS Raises Commuter Benefit Limit for 2026

All aboard! The IRS boosted the fringe benefit limit for transit and parking to $340 per month in 2026, up from $325, to account for inflation and increased commuting costs. As a quick refresher, Jawnt broke down what this means for both employees and employers as you move into the new year.

More money in employees' pockets

For employees, the benefit limit increase means converting commuting expenses into savings on taxes. By using pre-tax income for your commute expenses, you have lower taxable income. Lower taxable income means more money in your pocket. And with the limit now at $340, you get an extra boost for your commuting budget.

Less in employer payroll taxes

Whether you're an HR leader, benefits admin, or transportation manager, supporting commuter benefits is a smart financial move for you, too. Lower taxable income for your team translates to less spent on payroll taxes. It's a win-win situation! Plus, when employees are less stressed about their commute, the entire workplace is a more positive space.

How to stay compliant with the new $340 commuter benefit limit

So, what's next? Employers, make sure to chat with your commuter benefits provider and ensure you are in compliance with the new $340 limit.

Already working with Jawnt? You're all set. We'll automatically apply the new limit in January and provide ready-to-use communications to help keep your team informed, no extra lift required.

Let's ride together in 2026

This increase in the fringe benefit limit is a nod to the fact that commuting can be pricey. Who doesn't want to save a little extra where they can? Whether you're an employee looking to boost your budget or an employer ready to offer financial perks, let's ride into 2026 together!

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Want to learn more about how Jawnt can help employees and organizations save money on their commute? Get in touch with our team.