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Discover how New Jersey's commuter benefit law helps employees save on rising transit and toll costs, and what employers need to know to stay compliant and competitive.
Commuting in New Jersey is more expensive than ever–tolls on the Garden State Parkway and New Jersey Turnpike have increased by 3%, and, following a fare increase of 15% in 2024, NJ Transit fares will continue to rise by 3% every July moving forward. With commuting costs climbing, it’s more important than ever for employees to find ways to save, so keep reading for everything you need to know about getting to work in New Jersey, and how to pay for it.
Yes. Since March 1, 2020, when New Jersey’s Commuter Benefit Law went into effect, most New Jersey employers are now required to provide their employees with transit and vanpool benefits in accordance with the federal commuter tax benefit. This law allows employees to set aside a portion of their salary before taxes to pay for eligible transit and vanpool expenses.
New Jersey’s Commuter Benefit Law applies to employers who:
Read the full text of the New Jersey Commuter Benefit Law here.
Employers must offer full-time employees the opportunity to set aside pre-tax income for use on qualified transit and vanpooling expenses. The IRS sets a limit each year for how much employees can set aside for these expenses, and in 2025 that limit is $325 per month.
Employers must maintain records for six years to demonstrate that each employee eligible for a pre-tax commuter benefit was offered the opportunity to use their pre-tax salary for eligible transit and vanpool expenses.
Employers have 90 days from the date of the violation to provide a “cure” that meets the law’s requirements. If they still don’t provide a pre-tax transit benefit after those 90 days, they can expect a penalty of $100-250 for their first violation, and then another $250 for each additional month before a benefit is offered.
Jawnt has helped some of the largest employers on the east coast with their commuter benefits programs, including pre-tax benefits. You can schedule some time with us here, or talk to your local TMA:
Employers can only spend their pre-tax transit funds on qualified transit expenses. In New Jersey, most employees use their pre-tax funds on:
MTA and SEPTA riders can tap their personal debit or credit card, or a commuter debit card like Jawnt Pass, to ride NJ Transit buses, MTA subway and buses, PATH, PATCO and SEPTA, as well as use these cards to buy tickets and passes.
Employees who participate in their employers’ pre-tax commuter benefit program can load their transit or vanpool funds onto a commuter debit card—often available in a mobile wallet—for convenient, contactless use when riding or purchasing tickets and passes.
Jawnt has helped hundreds of thousands of employees with pre-tax benefits, and can help your organization stay in compliance–whether your team is just in the garden state, or distributed nationwide. Schedule a meeting to learn more.
