What Employers and Employees Need to Know About Bicycle Commuter Benefits

Updated in January 2026

Over the last decade, the U.S. has seen bike ridership boom as successful bike share programs, bike lane installations, and other bike-friendly initiatives encouraged people to get out and ride. Booming bike ridership is also changing the way commuters get to work. Here's everything you need to know about offering bicycle benefits to employees.

What are pre-tax benefits?

After salary, pre-tax benefits are perhaps the next most impactful compensatory tool that employers have to attract and retain employees. When an employee is offered and accepts a pre-tax benefit, the employer withholds a certain amount of the employee’s income before taxes are deducted for the employee to spend on purchases that are qualified as tax-free under federal tax law. Every time the employee spends that pre-tax money, they’re effectively getting an estimated 30% savings  on their purchase (the value of the federal and applicable state and local taxes they would have paid).

Retirement savings are perhaps the best known category of these “fringe benefits,” but the U.S. tax code also allows fringe benefits to cover other costs such as health and commuting expenses.

What commuter benefits are available today pre-tax?

As of 2026, U.S. commute benefits cover three categories of travel:

• Transit: any pass, token, farecard, voucher, or similar medium entitling a person to ride public  transit.
• Vanpool: termed “commuter highway vehicles,” this category includes any vehicle with at least 6 adults plus a driver, for which at least 80% of its mileage is for making commute trips and in which half of the passenger seats are occupied.
• Commuter parking: parking at or near an employer’s worksite or at a parking location from which the employee commutes to work by transit, carpools or vanpools..

In 2026, employees can have up to $340 set-aside from their taxable salary each month to pay for their use of  transit and/or vanpools and another $340 for parking. The total amount is tax-free.

How do bikes fit into commuter benefits?

In 2008, the Emergency Economic Stabilization Act was signed into law, adding qualified bike expenses as a fourth category, allowing employers to provide their employees with a tax-free subsidy of up to $20 a month for bicycle commuting expenses. This was great news, but the law was far from perfect.

• Bike expenses were eligible for reimbursement by employers, but employees could not use their pre-tax salary to pay for their expenses.
• $20 a month was much less than commuters could spend on transit and parking, which at the time was $225 per month, each.
• Commuters could only receive the bike benefit if they gave up transit and parking benefits. Bikes were the only category with this restriction.
• The law only covered personal bicycles. It didn’t cover bikeshare.
• Unlike the other commuter benefits, the monthly amount was fixed and did not increase over time the way the other benefits did.

Then in 2017, the Tax Cuts and Jobs Act suspended the bike commuter benefit until 2026. In 2025, the bike benefit was officially eliminated under the One Big Beautiful Bill Act, meaning that bike expenses are no longer tax-free commuting expenses. While legislation like the Bicycle Commuter Act, introduced by Senators Peter Welch (D-Vt.) and Alex Padilla (D-Calif.) aims to expand bike benefits in the workplace in the future, it is unlikely that the benefit will be restored in the near future.

How can employers offer bike benefits to employees?

Of course, you don’t actually have to wait on Congress to begin offering bicycle commute benefits to your employees. Hundreds of employers have looked at the cost, health, and time-savings of biking and decided to cover their employees’ bike commute costs directly as a post-tax benefit, a benefit that is taxable. Here are examples of commute benefits that employers have offered:

• Post-tax reimbursements. For example, Harvard reimburses their employees for bike costs up to $30 a month with a post-tax benefit.
• Annual allowance. Microsoft, for example, offers its employees a $900 per year “Stay Fit” taxable allowance for expenses related to biking.
• Get paid to ride. Sonos pays their employees cash for riding their bikes to the office, up to $5 a day.

Learn more about how post-tax benefits work.

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Jawnt can help administer bike share benefits and more, allowing for unique employee perks, reduction in parking use, and eventual commuter compliance. From hassle-free enrollment to comprehensive support, Jawnt’s user-friendly platform enables both employers and employees to get the most out of their commuter benefit. To learn more, get in touch.