As companies continue navigating the evolving workplace landscape, one issue is becoming increasingly urgent: the cost of commuting. Rising fuel prices, transit fare hikes, toll inflation, and parking shortages are driving up the cost of getting to work. In 2025, the average employee spends an estimated $314 per month commuting, according to FlexJobs. For many, this is not just a burden, it’s a barrier to returning to the office.
Enter commuter benefits…
Originally designed as a tax-advantaged way for employees to set aside money for transit and parking, commuter benefits are transforming. Employers are no longer just offering these benefits as an optional perk; they are actively funding them to incentivize a return to the office and boost employee satisfaction. From lifestyle spending accounts (LSAs) to direct transit subsidies, this trend is reshaping how companies think about workplace support.
The Numbers: What's Driving This Trend
- Generous Tax Limits: In 2025, employees can contribute up to $325/month pre-tax for transit and parking expenses. Employers can also contribute on a pre-tax basis, providing a dual tax savings benefit.
- Employer Contributions on the Rise: A Mercer survey found that 21% of employers with 5,000+ employees now offer some form of transit benefit, and this number is expected to rise as remote work declines and mandates expand.
- The Flexibility Factor: Hybrid schedules mean employees are commuting less often, but still facing high daily costs. Companies are responding by offering flexible benefit models that only deduct or contribute on days employees commute. Some are even adding post-tax support through LSAs for expenses like Uber rides, bike rentals, and even dry cleaning.
- Recruitment and Retention: Paychex and MetLife both note that commuter benefits are becoming a differentiator in a competitive job market. They signal care, modern thinking, and alignment with employee needs.
Real-World Examples: How Employers Are Leading the Way
- Amazon provides funded public transit, free shuttles, carpooling support, and bike reimbursements.
- Ernst & Young created a "Transition Fund" reimbursing commuting, pet care, and dependent care—resulting in a 150% increase in office attendance.
- Cameo offered a $10,000 salary increase to employees committing to four in-office days per week, along with free parking and gym access.
- BNY Mellon, JPMorgan Chase, and Grainger have all rolled out RTO mandates supported by enhanced commuter incentives.
These programs reflect a broader shift: commuting support is not just a benefit, it’s an engagement strategy.
Compliance: Where Commuter Benefits Are Mandated
Several states and municipalities now require commuter benefits, creating both an obligation and an opportunity:
- New Jersey: Required for employers with 20+ employees
- New York City: Mandated for employers with 20+ full-time employees
- San Francisco Bay Area: Mandated for employers with 50+ full-time employees
- Seattle & Washington, D.C.: Similar laws in place for employers with 20+ employees
Employers in these areas must comply, but those outside these jurisdictions are finding that voluntary adoption yields cultural and financial dividends.
Beyond the Basics: Why Partnering with a Specialized Benefits Provider Matters
Administering these programs effectively requires expertise. That’s why employers are turning to benefit administrators like Clarity Benefit Solutions. Here’s why:
- Compliance & Simplicity: From IRS caps to regional mandates, compliance is non-negotiable. Clarity ensures accuracy and simplifies administration.
- Integrated Technology: Clarity’s platforms make enrollment, funding, and usage seamless for both HR teams and employees.
- Real Flexibility: Clarity empowers employers to customize how and when contributions happen, based on days worked in office, transit types, or department-specific needs.
- Benefit Strategy & Innovation: Clarity doesn’t just process transactions. We help employers design forward-thinking commuter strategies, like pairing SmartRide plans with LSA funding or creating usage-based models.
- Employee Engagement: We provide communications, FAQs, and education to help participants make the most of their benefits.
Final Thoughts
The cost of commuting isn’t going away, but how employers respond can define their workforce strategy in 2025 and beyond. Offering commuter benefits, and better yet, funding them, is an investment in employee experience, recruitment, compliance, and company culture.
With partners like Clarity Benefit Solutions leading the way, employers can deliver impactful, modern benefits that support their people every step of the journey.