If your employer offers tax-favored transportation fringe benefits, you should probably take advantage of them. For 2025, employer-provided mass transit passes for train, subway and bus systems are tax-free to an employee, up to $325 a month. Your company can’t deduct the cost of this benefit. However, your company can offer a salary-reduction arrangement that allows you to set aside up to $325 per month from your salary to pay for transit passes. That way, you pay with before-tax dollars. For 2025, employer-provided parking allowances are also tax-free up to $325 per month. You can be given this fringe on top of the tax-free $325 a month for transit passes. Contact us with questions.
