Philadelphia commuter benefits law: employer guide
Philadelphia's Commuter Benefit Ordinance took effect December 31, 2022. It requires employers with 50 or more covered employees to offer a qualifying commuter benefit. A covered employee is anyone who worked an average of at least 30 hours per week in Philadelphia for the same employer over the previous 12 months.
What counts as compliance
Employers must offer one of two options:
- A pretax payroll election that lets employees exclude up to the IRS monthly limit ($340 for transit and $340 for parking in 2026) from taxable wages
- An employer-paid transit or vanpool benefit of equal value
Government employers are excluded from the ordinance.
Penalties
The City gives non-compliant employers 30 days plus a written warning before fines begin. After that, daily penalties run between $150 and $300. Aggregate fines in the first year can reach $100,000 in egregious cases. Enforcement is handled by the Mayor's Office of Labor.
Why Philly hourly employers usually choose pretax
Restaurant groups, healthcare networks, universities, and retail chains around Center City and University City carry headcounts that easily clear the 50-employee threshold.
A traditional pretax benefit administrator makes employees estimate monthly spending and pre-fund their accounts. That doesn't fit hourly schedules where hours and earnings vary. Alice is structured for that workforce: there's no up-front employer cost, no manual open enrollment to manage, and no employee pre-funding. The employer keeps a reserve amount in its Alice plan account; it belongs to the employer and is not a fee.
How Alice maps to the ordinance
Alice runs the pretax election under the federal commuter benefit rule (ยง132(f)) that satisfies Philadelphia's requirement. Eligible spending includes:
- SEPTA passes (TransPass, TrailPass, Key Card refills)
- PATCO
- NJ Transit fares used by commuters in the metro
- Vanpool
- Qualified parking such as garages, lots, meters, and parking apps
Uber and Lyft rides are not eligible. Vanpool services routed through those apps are a narrow exception. For the full list, see what parking and transit expenses are eligible.
Alice connects to 30+ payroll providers, including connections to ADP, UKG, Paylocity, Paycom, Paychex, Toast, and others. Setup starts with one call.
Talk to sales
sales@thisisalice.com or (929) 552-4625.
Figures shown are for the 2026 plan year and are set by the IRS. Limits are indexed annually by the IRS.
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Alice does not provide tax, legal, or financial advice. Consult your own tax preparer, lawyer, or financial advisor for guidance specific to your situation.