Manage your commuter benefits with Gusto
This article is for admins and employees who want to manage commuter benefits through Gusto.
Commuter benefits let you set aside pre-tax dollars to pay for qualified commuting expenses.
For admins: To offer commuter benefits with Gusto, your company must first offer health insurance with Gusto. If you already offer commuter benefits through a third party, you can set up payroll deductions.
Expand each section to learn how commuter benefits work. If we manage your commuter benefits, go to the Benefits page in your Gusto account to learn about your plan’s details.
Eligibility depends on the type of employment and role.
Who’s eligible
All full-time employees can enroll.
Commuter eligibility operates independently of medical eligibility. Your company can also offer commuter benefits to:
Part-time employees
Seasonal employees
Variable employees
If you want to change your company’s commuter eligibility rules, contact us for help. To contact us, sign in to your Gusto account and click the help icon 
in the top-right corner of the page.
Who’s ineligible
The Internal Revenue Service (IRS) does not allow some people to participate in commuter benefits:
Self-employed individuals
Owners taking owner’s draws
Partners in a partnership
2% or greater shareholders of an S Corporation
You can only use commuter benefit funds to pay for qualified commuting expenses. Here’s what qualifies and what does not.
Qualified transit expenses
Qualified parking expenses
Unqualified expenses
Train
Parking lots
Tolls
Subway
Parking meters
Gas
Bus
Parking garages
Car maintenance
Ferry
Parking space provided by your employer
Parking that is not part of your commute (Example: Parking for lunch or at a third-party location, even if it’s for work)
Vanpool
Bike expenses
Parking at a secondary work location
Some public transit stations sell a variety of items, like newspapers, coffee, parking passes, and more. You cannot use commuter benefits to pay for these items. If a vendor declines your card, you can submit a claim to get reimbursed for qualified expenses only.
You can only use parking funds for parking expenses and transit funds for transit expenses. You cannot transfer funds between accounts. Once you deposit funds into an account, you can only remove them to pay for qualified expenses. If your company cancels the benefit or you leave your company, check the Use your commuter benefits section of the article to learn about your deadline to submit claims.
Learn about IRS contribution limits, employer contributions, and managing your contributions.
Monthly contribution and spending limits
The IRS sets a monthly limit on how much you can contribute and spend for commuter benefits. You can contribute and spend up to the monthly limit.
2026: $340/month for transit and $340/month for parking
2025: $325/month for transit and $325/month for parking
Any unused funds roll over to the next month. You can accumulate unlimited funds, but you can only spend up to the IRS limit each month. You cannot move funds between parking and transit accounts. Once you deposit funds into an account, you can only remove them to pay for qualified expenses. You can change your contribution each month, so if you have extra funds to spend, you can decrease your contribution limit.
Employer contributions
Employers can contribute to employee commuter accounts, but they do not have to.
If your employer contributes, you must elect to receive at least that amount while enrolling to receive the contribution. For example, if your employer offers up to $100 total, you can apply it to parking, transit, or both. To get the full employer contribution, you need to elect at least $100 in total between parking and transit. You could elect $100 to parking and $0 to transit, or $50 to parking and $50 to transit. If you only elect $50 for parking and $0 for transit, you miss out on $50 in employer contributions. If you elect $100 toward parking and $50 toward transit, we’ll deduct $50 from your paycheck each month.
Check your contributions
If you want to know how much you’ve contributed to your commuter benefits, check your paystub or the Benefits page in your Gusto account.
Change your contributions
You can change your commuter benefit elections at any time once your benefit is active.
You must submit changes 2 days before the last day of a month for them to take effect on the first day of the following month. For example, if you want changes to take effect on May 1, submit your change in Gusto by April 28.
Learn when funds become available, how we deduct contributions, and how bank account debits work.
Fund availability
Your full election amount becomes available on the first of each month. You can only spend up to the IRS limit each month.
Payroll deductions
We deduct employee contributions pre-tax from paychecks.
We split your monthly deduction evenly across each payroll with a check date in that month. For example, if you contribute $200 a month, and your company’s check dates are on the 15th and the 30th of each month, we deduct $100 on each check date.
Exception: If your employer processes payroll in the month before the check date, we take any scheduled catch-up deductions but do not take regular deductions. We split regular deductions evenly across the remaining check dates for that month.
Company bank account debits
Learn about funding requirements, associated bank debits, and how to reconcile those debits.
Some cities have commuter benefit laws that apply to companies based on their location.
If you operate in any of these cities, you must offer commuter benefits. Your employees do not have to enroll, but you must make the benefit available to them.
Here are some cities with known commuter benefit laws:
City
Requirements apply to companies with...
10+ full-time employees
20+ full-time employees
10+ employees who work an average of at least 10 hours per week
20+ employees
20+ employees
20+ employees
This list is not complete. Check your local and state laws to confirm you meet any requirements.
When employees set aside pre-tax money for commuter benefits, it lowers their gross taxable income. The IRS taxes employers for FICA (Federal Income Contribution Act) based on employee earnings, so commuter benefits also reduce your employer taxes.
Here’s everything you need to know about setting up commuter benefits for your company.
Your company pays these fees to offer commuter benefits:
$200 annual base fee + $4 per enrolling employee per month ($20 minimum). Your company pays both fees.
The base fee: If you offer multiple pre-tax benefit accounts, you only pay the base fee once per year. For example, if you offer just commuter benefits, you pay $200/year. If you offer commuter benefits plus a Flexible Spending Account (FSA) and Health Savings Account (HSA), you still pay $200/year total.
An enrolling employee is anyone with an active subscription for the invoiced month.
To offer commuter benefits with Gusto, you must have health insurance with Gusto or use our broker integration.
If you already offer commuter benefits and manage them with another provider, you can transfer them to Gusto or set up payroll deductions.
Set up new commuter benefits in Gusto
You can start offering commuter benefits to your team at any time during the year. Benefits begin two calendar months later on the first of the month. For example, if you complete the setup in Gusto on any day in January, the plan starts on March 1.
To set up new commuter benefits in Gusto:
Go to Benefits.
Scroll to Transportation.
Next to Commuter Benefits, click Set up.
Select Add benefit to set up new commuter benefits.
Click Yes if you currently offer medical benefits to employees. Click Learn more. Then, follow the rest of the prompts to begin moving your medical insurance to Gusto. To offer commuter benefits with Gusto, you must have health insurance with Gusto or use our broker integration.
Click No if you want to start offering medical benefits. Then, click Add new benefits and follow the rest of the prompts.
Once you finish adding commuter benefits, we’ll email you the effective date and notify your eligible employees to enroll.
Unlike most other benefits, your team can enroll, cancel, or change their commuter benefit elections at any time during the year.
If your company currently offers commuter benefits, you can transfer them to Gusto.
To transfer existing commuter benefits to Gusto:
Go to Benefits.
Scroll to Transportation.
Next to Commuter Benefits, click Set up.
Select I already have commuter benefits.
Click Learn More.
If you do not offer medical benefits through Gusto, the next screen asks if your company currently offers any medical plans and provides next steps. You must have health insurance with Gusto or use our broker integration to offer commuter benefits with Gusto.
Once you’ve finished adding info about your company’s commuter benefits, we’ll reach out with the next steps to transfer them to Gusto.
Learn when you can enroll and how to sign up for commuter benefits.
When you can enroll
Eligible employees can enroll in commuter benefits or adjust their contributions at any time throughout the year.
Your benefits start date depends on when you enroll:
If you enroll by the 20th of a month, your benefits will start on the 1st of the next month. For example, if you enroll on May 20, your benefits will start on June 1.
If you enroll after the 20th of a month, your benefits will start on the 1st of the second month. For example, if you enroll on May 21, your benefits will start on July 1.
Enroll in commuter benefits
To enroll in commuter benefits from your Gusto account:
Go to Benefits.
Find the Commuter Benefits tile and click Enroll.
Select if you’d like to enroll in transit benefits, parking benefits, or both.
You can only use parking funds for parking expenses and transit funds for transit expenses. You cannot transfer funds between accounts.
Enter how much money you’d like to elect for each month.
If your employer contributes, you must elect at least that amount to receive the contribution. For example, if your employer offers up to $100 total, you can apply it to parking, transit, or both. To get the full employer contribution, you need to elect at least $100 in total between parking and transit. You could elect $100 to parking and $0 to transit, or $50 to parking and $50 to transit. If you only elect $50 for parking and $0 for transit, you miss out on $50 in employer contributions. If you elect to pay $100 toward parking and $50 toward transit, we’ll deduct $50 from your paycheck each month.
Click Confirm & Enroll.
We send your Benefits Card to your mailing address in a plain white envelope before your benefits start date. Use the Benefits Card Hub to manage your cards, submit expenses for reimbursement, and more.
If you need to change your election, you can do so anytime during the year by following the steps in the Manage your commuter benefits section of the article.
You can use commuter benefit funds for transit or parking expenses by swiping your card or entering your card number for an online purchase. When making a purchase online, use your home address as the billing address.
Important: The IRS sets a monthly limit for both contributions and spending. This means you can only contribute up to the monthly limit, and you can only spend up to the monthly limit. The IRS calculates the monthly spending limit based on a service’s purchase date, not the date you submit a claim.
What you can use commuter funds for
Once you contribute funds to a commuting account (transit or parking), you must use those funds for eligible expenses within that account. This means:
Transit funds: Use for transit expenses between your home and primary place of work.
Parking funds: Use for parking at your primary place of work or at your transit location.
Three ways to pay for commuter expenses
You can use your funds for eligible expenses in three ways:
Swipe your card at an eligible vendor.
Save your receipt—we may email you if the IRS requires more documentation for the transaction.
Some vendors do not allow the IRS to verify that your purchase qualifies as an eligible expense. If this happens, the vendor may deny the transaction at the point of sale. Pay out of pocket, save your receipt, then submit a claim for reimbursement by following the steps in the Submit an expense for reimbursement or pay a bill section of the article.
Pay out of pocket and submit the expense for reimbursement. Follow the steps in the Submit an expense for reimbursement or pay a bill section of the article to submit claims in the Benefits Card Hub.
Pay a bill by sending a check directly to the provider.
To access the Benefits Card Hub:
Click Benefits.
Find the Commuter Benefits tile and click View.
Click Open Benefits Card Hub.
Check out our Use the Benefits Card Hub article to learn about managing your card, funds, and contributions.
You can review and manage your expenses in the Benefits Card Hub: Under My Accounts, click Commuter. Learn how to register for or sign in to the Benefits Card Hub.
Add or change your reimbursement method
You can choose to be reimbursed by check, direct deposit, Venmo, or PayPal.
To set up or change your reimbursement method:
Click Benefits.
Find the Commuter Benefits tile and click View.
Click Open Benefits Card Hub.
In the top-right corner, click on your initials.
Click Manage Account.
Click the Reimbursement Options tab.
Choose Add Payment Method.
Fill out the prompts, and you’re ready to start getting reimbursed.
Note: We take 2–3 business days to verify a bank account.
What receipts need to include
Make sure your receipt includes:
Your name
Vendor name
Date of purchase
Cost of purchase
Proof of payment
Submit an expense for reimbursement
If you paid out of pocket for an eligible expense, you can submit it for reimbursement as long as you received the service during your coverage period and the final claim submission date has not passed.
To submit an expense for reimbursement:
Click Benefits.
Find the Commuter Benefits tile and click View.
Click Open Benefits Card Hub.
Choose Reimburse Me.
Upload your receipt or bill.
Review the information on the next page. If everything looks correct, you can submit the request. If anything needs to be corrected, you can edit the field directly.
Choose your reimbursement method and submit the request.
If we can validate the information immediately, we’ll approve your claim right away. If we need to review it further, you’ll receive an email when we process the claim. This typically takes 3-5 business days.
When you’ll be reimbursed
If we approve your claim, you’ll be reimbursed using the method you selected.
Here’s how we send reimbursements, based on the method you chose:
Check: We mail a check to your home address in a plain envelope. If you have not cashed the check, you can update your reimbursement method to direct deposit, Venmo, or PayPal in the Benefits Card Hub.
Direct deposit: Your bank receives the ACH within 1–3 days. It appears on your bank statement as “Gusto PayClaim.”
Venmo/PayPal: “Elevate” sends payment instantly to your Venmo or PayPal account. You’ll pay a $1 fee per transaction for this service.
How to submit expenses after leaving your company
If your benefit has a runout period, you may have extra time to submit claims for qualifying expenses from your employment. You can confirm your last day to submit an expense in the Benefits Card Hub.
If you did not register for your Benefits Card Hub during your employment, contact us for help. To contact us, sign in to your Gusto account and click the help icon in the top-right corner of the page.
Pay a bill directly
If you receive a bill for an eligible expense, you can pay it by check directly from your pre-tax benefit account.
If you’ve already paid the bill and want reimbursement, go to the Submit an expense for reimbursement instructions above.
To pay a bill directly:
Click Benefits.
Find the Commuter Benefits tile and click View.
Click Open Benefits Card Hub.
Choose Pay a bill.
Upload your receipt.
Review the information on the next page. If everything looks correct, you can submit the request.
If we can identify all the required information in the receipt, we automatically approve your claim and send the payment to the provider by check. If not, we manually review the claim within 3-5 business days. You’ll receive an email once we review and process the claim.
Note: Checks expire after 180 days. You’ll receive an email if a check is about to expire. If we sent the check to your provider, please connect with them first about the payment.
The IRS requires you to purchase transit passes with your pre-tax commuter card only at authorized transit vendors. These are vendors, kiosks, or machines that sell only transit passes. If you try to purchase your transit pass at Walgreens, Whole Foods, or any other merchant that sells items other than transit passes, it will be denied. For more on the IRS regulation, check out these resources: IRS Publication 15-B and Section 132(f) of Internal Revenue Code.
San Francisco Bay Area transit vendors
CalTrain and BART station machines do not accept commuter cards because these kiosks also sell parking passes.
For BART, CalTrain, Muni, and many other Bay Area transportation options, we recommend you autoload a Clipper Card online.
Washington D.C. and Maryland transit vendors
Washington D.C.‘s WMATA SmarTrip and Baltimore’s Charm Card do not accept commuter cards because you can use funds from those accounts to pay for ineligible expenses like parking. If you need to use your commuter card in the D.C. or Maryland areas, follow the usual steps to submit a claim.
Expand the sections for more ways to manage your commuter benefits.
You can change your commuter benefit elections at any time once your benefit is active. If this is your first enrollment and you’ve already submitted the amount, reach out to our team at [email protected] to make the change.
You must submit changes 2 days before the last day of the month for them to take effect on the first day of the following month. For example, if you want changes to take effect on May 1, submit your change in Gusto by April 28.
Change your commuter benefit contribution
To change your commuter benefits contribution:
Go to Benefits.
Find the Commuter Benefits tile and click View.
Click Edit election.
Select if you want to enroll in Transit or Parking benefits, or both.
Enter how much money you want to contribute per month towards your commuter benefit.
Click Confirm & Enroll.
Cancel your commuter benefits
You can cancel your commuter enrollment at any time. If you have a current balance, you have 90 days after you end the policy to submit claims for services you received while the policy was active. After the 90 days, your company receives any remaining funds. We do not reimburse these funds, even if you paid them.
To avoid losing the funds, reduce your contribution amount instead of canceling your enrollment. This gives you time to use the balance in your account before the policy ends, without needing to add much more money to it.
If you no longer want to offer commuter benefits to your team, you can submit a cancellation request from your admin account.
You do not need to file tax forms for commuter benefits.
After your plan year ends or you leave your company, you may have extra time to submit expenses for reimbursement. To confirm your deadline for submitting an expense for reimbursement, sign in to your Gusto account and go to the Benefits page. Find the Commuter tile and click View, then click Open Gusto Benefits Card Hub.
If your company stops offering commuter benefits or you cancel your enrollment, here’s how long you have to use your funds and what happens to leftover money.
Runout period after plan ends
If your company stops offering commuter benefits through Gusto or you cancel your own plan, you have 90 days after the last day of the plan period to submit claims for expenses you received during the plan period. This is called the runout period.
If your company moves off Gusto or finds a new broker, connect with your employer to see if your commuter benefits will move as well. In either situation, you cannot submit expenses for reimbursement after the plan ends.
What happens to leftover funds
After the 90-day runout period, your company receives any unused funds (as set by Section 1.132-9(b) Q&A 14(d) of this IRS document).
Runout period after leaving
If you leave your company while enrolled in commuter benefits, your plan ends on your last day of employment. After that, you have 90 days to submit expenses for reimbursement for services you received while the policy was active.
What happens to leftover funds
After the runout period ends, your company receives any unused funds (as set by Section 1.132-9(b) Q&A 14(d) of this IRS document).