Jawnt was founded in Philadelphia (hence the name), and has since been proud to administer the city’s Zero Fare Program, offering free transportation to city residents living in poverty. Keep reading for everything you need to know about riding on the nation’s sixth-largest public transportation system.
Does Philadelphia have a transit benefit mandate for employers?
Yes. Since December 31, 2022, when Philadelphia’s Commuter Benefit Law went into effect, most Philadelphia employers are now required to provide their employees with the opportunity to set aside a certain amount of their income pre-tax to cover commuting expenses.
Who is affected by Philadelphia’s Commuter Benefit Law?
Philadelphia’s Commuter Benefit Law applies to employers who:
- Have a location in the City of Philadelphia
- Have 50 or more employees that have been paid to work at least 30 hours a week for at least a year.
- Operate as an individual, co-partnership, association, corporation, or any other entity. Government employers are excluded.
Read the full text of the ordinance here.
What transit benefits do employers have to provide to comply with Philadelphia’s Commuter Benefit Law?
Employers must offer one or more of the following benefits to comply with the Philadelphia Commuter Benefit Law.
- A pre-tax transit benefit. Through these programs, employees can set cash (up to $325 a month in 2025) aside from their paycheck to be used towards transit.
- An employer-paid pass. Employers can provide a transit pass to employees at no cost to the employee. As long as the value is equal to or less than the federal monthly limit for transportation fringe benefits ($325 a month in 2025), this pass is not taxed as income on the employee.
Does SEPTA Key Advantage satisfy Philadelphia’s Commuter Benefit Law?
Yes. Offering a SEPTA Key Advantage pass to employees satisfies the requirements of Philadelphia’s Commuter Benefit Law.
SEPTA launched its groundbreaking institutional pass program, SEPTA Key Advantage, in May 2022. When employers enroll in SEPTA Key Advantage, they can provide unlimited monthly passes for the entire SEPTA system (regional rail, buses, trolleys, subways, and a high-speed line) at the low cost of about $27 per employee. This is nearly 87% discount off the $204 retail price of a monthly Anywhere TrailPass.
Learn more about SEPTA Key Advantage here.
What does Philadelphia’s Commuter Benefit Law require of bike benefits?
Philadelphia’s Commuter Benefit Law does require that employers provide a bike benefit, as allowed by federal law, to those employees who bike to work as an alternative to a transit benefit. While the federal bike benefit allows a tax-free subsidy up to $20 per month, that section of the federal law has been suspended until 2026.
Until then, the Philadelphia law doesn’t require employers to offer this benefit. This hasn't stopped several major employers from offering annual bikeshare memberships or monthly contributions towards owning and maintaining bikes. Read more about bikes in our Comprehensive Guide to Post-Tax Benefits.
What do Philadelphia employers need to know about parking?
Philadelphia’s Commuter Benefit Law allows employers to offer their employees a tax-free benefit for commuter parking. Under this provision, employees can park at locations from which they commute by transit, vanpools, or carpools and get tax-free reimbursement for the parking expenses—up to $325 a month in 2025—in addition to receiving a transit and/or vanpool benefit of up to $325.
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.
What transit benefits do Philadelphia employees most want?
Popular transit benefit offerings in Philadelphia include:
- Providing a monthly transit pass to the employee’s choice of transit agency. This could be SEPTA, PATCO, NJT, or Amtrak.
- Subsidizing a transit pass. Employees can receive, tax-free, up to $325 a month to cover the cost of their monthly transit pass. Employers can also offer a partial tax-free subsidy and allow their employees to use their pre-tax income to pay the remaining cost of their transit pass up to the monthly limit.
- Philadelphia employees often commute across a combination of agencies, so consider offering a flexible pre-tax transit benefits card that pays for trips across transit agencies. For example, many commuters in northwest Philadelphia drive to Exton station, and take whichever train (Amtrak or SEPTA Regional Rail) arrives first. These employees don’t want to be locked into one monthly pass or the other.
- Indego Bikeshare has 1750 bikes that can be parked in any of 140 stations across Philadelphia, and many Philadelphians rely on these bikes to traverse that last stretch between a train and their home or office. Indego offers annual memberships, with discounts for bulk purchases.
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.
