What’s Covered
Transit benefits – subway, bus, commuter rail, ferry, streetcar, and eligible vanpool (6+ seats) passes, fare cards, or vouchers for travel between home and work.
2025 IRS limit – $325/month per employee.
How It Works
Employees choose their contribution – They can set aside pre-tax dollars each month for eligible commuting costs.
Warp enforces IRS rules – Monthly limits are automatically applied, and any amount over the limit is taxed.
Tax-free payments in payroll – The total commuter benefit (employer + employee contributions) is included in each paycheck, with the pre-tax portion excluded from taxable wages.
Example:
Employer offers $100/month.
Employee adds $50/month from their paycheck.
Total benefit = $150/month.
Employee receives $75 per semi-monthly paycheck, tax free.
Monthly Pre-Tax Limits
Federal: Up to the monthly IRS limit is excluded from all federal taxes.
State & Local: Warp applies the correct treatment automatically—accounting for special cases in California, New Jersey, and Pennsylvania.
Why Offer Commuter Benefits
Reduce taxable wages for employees
Lower payroll taxes for employers
Encourage sustainable commuting habits
Stay compliant with federal, state, and local regulations
Eligibility
Commuter benefits can be offered to W-2 employees who regularly commute to an office or co-working space.
Fully remote employees without a commute are generally not eligible.
FAQs
Can employees change their contribution mid-year?
Yes, contributions can be changed each month.
Are rideshares like Uber or Lyft eligible?
Only if they meet vanpool rules (6+ passengers, 80% of mileage for commuting).
How to Set It Up in Warp
Create a new benefit in Warp → select Commuter Benefits
Set employer and employee contribution amounts.
Warp tracks totals and applies IRS limits automatically.
We calculate and apply taxes for amounts above the limit.