How $0 No-Out-Of-Pocket Cost Works in NYC

Example: An NYC employee's gross wages are $1,000/week and they spend $50 on parking.

Before Alice

• Employee is taxed on the full $1,000.
• Employer pays 7.99% payroll tax on the $1,000 paid to the employee ($79.90).
• Total cost to Employer: $1,079.90

After Alice

• Employee spends $50 pretax on parking. They are now taxed on $950, adding about ten dollars to their take home pay.
• Employer pays 7.99% payroll tax on the $950 which is $75.91.
• Employer paid $3.99 less in employer payroll taxes. Alice invoices this exact amount.

The Result

• $75.91 (Lower Employer Payroll Tax) + $3.99 (Alice Invoice) = $79.90 + $1000 wages
• Total cost to Employer: $1,079.90

Net change to your P&L: $0.00