Offer ORCA Business Programs as a Tax-Free Commuter Benefit

Transit benefits aren't just good for employees, they're one of the few perks that reduce payroll taxes for employers, too.

What are the pre-tax benefits?

Under IRS Section 132(f), employers can provide transit benefits tax-free. That means the benefit is excluded from employees' gross income and from your payroll taxes. For 2026, the monthly exclusion limit is $340 per employee.

Employees who use pre-tax dollars for their commute save an estimated 25–30% on commuting costs. Employers save an average of 7.65% on payroll taxes for each participating employee, because those dollars are excluded from FICA. It's a meaningful return on a low-cost benefit.

Two ways to offer it

ORCA Business Passport:

A flat-rate program where employees get fully unlimited access to regional transit: bus, light rail, Sounder, and more for a set annual cost per employee. Simple to administer, easy to communicate, and a benefit employees feel every day.

ORCA Business Choice:

A more flexible option where you load a set dollar amount onto each employee's ORCA e-purse. Employees draw from that balance as they commute. They only use what they need, and you control exactly how much you contribute per person. This works well for employers who want to offer something meaningful without committing to full unlimited access for every employee.

Frequently Asked Questions

Not necessarily. IRS rules don't require a uniform benefit across all employees. Business Choice makes it easy to set different contribution levels by employee group. If you're using a tiered structure, check with your payroll provider or benefits advisor to make sure your setup doesn't inadvertently favor highly compensated employees.
No. There's no federally mandated enrollment window for transit benefits, unlike health insurance. Most employers either enroll employees at onboarding or fold it into their annual benefits calendar. If employees are contributing via pre-tax payroll deductions, those elections need to be made prospectively, not retroactively.
Employer contributions are excluded from FICA, FUTA, and federal income tax withholding — for both you and your employees. That translates to an average of 7.65% in payroll tax savings per participating employee for the employer, and an estimated 25–30% reduction in commuting costs for the employee, depending on their tax bracket.
es. Parking and transit are separate benefit categories under IRS rules, each with their own monthly exclusion limit. ORCA for Business is a natural complement to a parking subsidy by giving employees who don't drive something of equivalent value.