Should employers offer pretax parking benefits?
Yes, for most employers whose workers drive to a worksite. The qualified parking benefit under the federal commuter benefit rule (§132(f)) lets employees exclude up to $340 per month in 2026 from taxable wages. It covers parking near the workplace or near a transit stop they use to commute.
Employers capture about 7.65% in FICA savings on every pretax dollar elected.
When it makes sense
- Employers with on-site or near-site parking that employees pay for.
- Multi-site operators where staff park at garages or lots.
- Hospitals and healthcare campuses where shift workers park in paid garages.
- Retail and restaurant chains in dense corridors with metered or app-paid parking.
- Any employer with hourly drivers commuting to a fixed worksite.
When it's less compelling
- Fully remote employers.
- Employers who already provide free parking (there is no qualified pretax expense to deduct).
- Employers whose workforce commutes only by transit (the transit benefit covers that separately).
What counts as "qualified parking"
Qualified parking is parking the employee pays for at or near the workplace, using garages, surface lots, meters, or parking apps. It also covers parking at or near a location from which the employee commutes to work by mass transit, vanpool, or carpool.
The expense must be incurred by the employee. Employer-paid free parking is a different §132 exclusion (working condition fringe or qualified parking provided by the employer). For details, see what counts as qualified parking.
The math
A worker electing the full $340 per month parking benefit excludes $4,080 per year from taxable wages. At a combined 25% federal, state, and FICA rate, that's roughly $1,000 per year the employee keeps. The employer captures about $312 per year in FICA savings on that same election.
How Alice runs parking pretax
Alice Card is accepted at qualifying parking merchants: garages, lots, meters, and parking apps. Employees swipe; Alice handles the §132(f) substantiation.
There is 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. Setup starts with one call.
Talk to sales
sales@thisisalice.com or (929) 552-4625.
For the full list of eligible commuter expenses, see what parking and transit expenses are eligible. Eligibility is set by IRC §132(f).
Figures shown are for the 2026 plan year and are set by the IRS. Limits are indexed annually by the IRS.
Savings shown or implied — including any reference to "cash back" or take-home pay — are illustrative. Actual savings depend on your tax rate, benefit elections, and eligible spending each pay period. "Cash back" in Alice's materials refers to the federal, state, and FICA payroll taxes you don't pay on eligible commuter spending. It is income tax you keep, not a cash payment from Alice, your employer, or any third party. Alice does not provide cash back, rebates, or any direct financial benefit in connection with the Program. Alice does not provide tax, legal, or financial advice. Consult your own tax preparer, lawyer, or financial advisor for guidance specific to your situation.
Pretax Hero Visa Commercial Card is powered by Stripe and issued by Celtic Bank. Program funds held at Fifth Third Bank, N.A. (Member FDIC). Use of card and program is subject to the cardholder terms and related agreements presented at issuance.