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. 

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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. 

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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 private entity. Government employers are excluded.

Read the full text of the ordinance here.

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What transit benefits do employers have to provide to comply with Philadelphia’s Commuter Benefits Law?

Employers must offer one or more of the following benefits to comply with the Philadelphia Commuter Benefits Law.

1. A pre-tax transit benefit. Through these programs, employees can set cash (up to $315 a month in 2024) aside from their paycheck to be used towards transit. 
2. An employer-paid pass. Employers can provide a transit pass to employees at no cost to the employee. As long as the value is below the federal monthly limit for transportation fringe benefits ($315 a month in 2024), this pass is not taxed as income on the employee.

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Does SEPTA Key Advantage satisfy Philadelphia’s Commuter Benefits Law?

Yes. Offering a SEPTA Key Advantage pass to employees satisfies the requirements of Philadelphia’s Commuter Benefits 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.

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What does Philadelphia’s Commuter Benefits Law require of bike benefits?

The transit benefits required in Philadelphia’s Commuter Benefits Law are based on Section 132(f) of the Federal tax code. This section currently only allows pre-tax deductions for parking and transit, but from 2008-2017, expenses related to bicycle commuting were also allowed. The bike benefit was suspended temporarily in 2017, and the suspension is still set to end on December 31, 2025. When it was suspended, the bike benefit allowed for $20 a month to be deducted pre-tax for bike expenses under some conditions.

• Bike commuters can only claim the bike benefit, and not transit or parking.
• Bikeshare is not eligible for reimbursement (remember this was written in 2008, before bikeshare was as big as it is today).
• Bike benefits must be distributed as receipt-based reimbursements.

Philadelphia’s Commuter Benefits Law is unique among commuter benefit laws nationally, because it anticipates the return of the bike benefit. If nothing changes with the temporary suspension, when the federal bike benefit comes back, Philadelphia employers will be required to offer it as well.

Activists across the US have been working to bring back the bike benefit sooner. They also want to remove the exclusivity, bikeshare, and reimbursement restrictions, and increase the amount to be similar to transit and parking. To learn more about this work, Jawnt recommends subscribing to People for Bikes’ newsletter.

There’s also no prohibition now against employers offering post-tax bike benefits today, and many do. The two most common forms are a subsidized bikeshare membership and reimbursements for biking-related expenses.

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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.

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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 up to $315 a month in transit benefit pre-tax, and this can be in a combination from their own paycheck or from the employer as a subsidy.
• 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.

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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.

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