Tax Breaks for Your Employees

Federal and Oregon state tax laws make it possible for businesses to offer a pre-tax transportation program to employees. Eligible employees can pay for their TriMet passes through pre-tax payroll deduction.

Pre-tax deduction reduces employees' taxable earnings, which lowers the amount of income tax and FICA (Social Security and Medicare) they have to pay. Individual savings will depend on an employee's income tax bracket as well as federal and state income tax rates.

Each month, a fixed amount of money (for example, the cost of a TriMet monthly pass) is deducted automatically from the employee's paycheck, before taxes are assessed. Unlike "cafeteria" type flexible spending accounts (FSAs), employees can cancel the deduction at any time.

For more information on pre-tax payroll deductions, see the Internal Revenue Code-Section 132 (F), as amended by TEA-21, Title IX, Section 910. Also check with your tax advisor.

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