Portland’s transit options are enviable–TriMet buses, MAX Light Rail, Portland Streetcar, and the Portland Aerial Tram(!). Keep reading to learn more about commuter benefit mandates, vanpools, bikeshares, and employer discount passes.
Does Portland have a transit benefit mandate for employers?
No. Employers are allowed to offer pre-tax commuter benefits to their employees, but are not required to do so by either the State of Oregon or the City of Portland.
What transit benefits do Portland employees most want?
To take advantage of pre-tax transit benefits, employers must offer employees the opportunity to set aside a portion of their income before taxes. This amount is set by the federal government each year, and is $315 per month in 2024. This money can only be used for qualified transit expenses.
In Portland, most employees spend their pre-tax transit funds on TriMet. TriMet offers two ways to pay: monthly passes and pay as you go.
- Monthly passes are available for TriMet, C-TRAN (local and regional), and the Portland Streetcar. Employees need to acquire a Hop Card, and employers can work directly with TriMet or a third party benefits administrator to ensure the correct monthly pass is loaded onto the card each month.
- Pay as you go is more popular for employees that commute less than five days a week or commute across more than one system. Employers work with a third party benefits administrator to load the employee’s pre-tax transit funds onto a special card that is restricted to only be accepted for qualified transit expenses.
Amtrak is also a popular choice for Portland commuters. Amtrak offers monthly passes and 10-ride passes out of Portland.
Employees can be responsible for the full $315 per month, or their employer can contribute a partial or full subsidy. As long as the total of the employee and employer contributions are below $315 a month, the benefit is pre-tax.
What do Portland employers need to know about vanpool?
Vanpools, also known as “commuter highway vehicles”, are highway-ready vehicles that seat at least 6 adults (not including the driver). To qualify as a vanpool, the vanpool organizer must reasonably expect that at least 80% of the vehicle mileage will be for transporting employees between their homes and workplace with employees occupying at least one-half the vehicle's seats (not including the driver's).
The monthly pre-tax deduction limit applies to vanpool and transit combined.
Read more about vanpools in Oregon here.
What do Portland employers need to know about bikes?
Commuter benefits are defined federally by the IRS. This section currently only allows pre-tax deductions for parking and transit, but from 2008-2017, expenses related to bicycle commuting were also allowed. The bike benefit was suspended temporarily in 2017, and the suspension is still set to end on December 31, 2025. When it was suspended, the bike benefit allowed for $20 a month to be deducted pre-tax for bike expenses under some conditions.
- Bike commuters can only claim the bike benefit, and not transit or parking.
- Bikeshare is not eligible for reimbursement (remember this was written in 2008, before bikeshare was as big as it is today).
- Bike benefits must be distributed as receipt-based reimbursements.
Activists in Portland and across the US have been working to bring back the bike benefit sooner. They also want to remove the exclusivity, bikeshare, and reimbursement restrictions, and increase the amount to be similar to transit and parking. To learn more about this work, Jawnt recommends subscribing to People for Bikes’ newsletter.
There’s also no prohibition now against employers offering post-tax bike benefits today, and many do. The two most common forms are a subsidized bikeshare membership and reimbursements for biking-related expenses.
What do Portland employers need to know about parking?
Employers are federally allowed to offer employees the option to set aside pre-tax funds for parking, as well.
Can Portland employers buy discounted transit passes from transit agencies?
Portland’s TriMet offers an annual pass with a flat discount to employers for the cost of 11 months’ fare. Read more here.
Why are commuter benefits good for employers?
- Employers can reduce their payroll taxes because the payroll set aside for pre-tax transit benefits are not taxable income. Payroll deductions save employers directly.
- Pre-tax benefits make employers more competitive for top talent.
- Commuter benefits make employers more willing to embrace return-to-office mandates.
- Incentivizing transit usage reduces demand for parking, which can be expensive for employers to provide.
- Pre-tax transit benefits are a relatively low cost, high impact, and demonstrable commitment to carbon reduction and environmental sustainability. Jawnt can help you measure and report the carbon your organization is saving by supporting transit.
Want to learn more?
Jawnt’s team of transit planners and benefit administrators are available to help you understand your options, requirements, and find a solution that will satisfy employers and employees alike. Drop us a line today to get started.
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