{"id":3817,"date":"2024-12-09T08:08:02","date_gmt":"2024-12-09T15:08:02","guid":{"rendered":"https:\/\/compt.io\/parking-reimbursement\/"},"modified":"2025-09-05T08:12:20","modified_gmt":"2025-09-05T14:12:20","slug":"parking-reimbursement","status":"publish","type":"post","link":"https:\/\/compt.io\/blog\/parking-reimbursement\/","title":{"rendered":"Parking Reimbursement for Employees Explained [2026]"},"content":{"rendered":"\n<p><strong>There&#8217;s no way around it:<\/strong> The work commute is a frustrating way to start (and finish) the day, especially if your office is in a huge metro area like LA, SF, DC, or Boston.<\/p>\n\n\n\n<p>(See this hilarious post from our Founder and CEO for the real-life struggles of a city commute!)<\/p>\n\n\n\n<iframe class=\"lazyload\" data-src=\"https:\/\/www.linkedin.com\/embed\/feed\/update\/urn:li:share:7258206510932004867\" height=\"648\" width=\"504\" frameborder=\"0\" allowfullscreen=\"\" title=\"Embedded post\"><\/iframe>\n\n\n\n<p>Besides sitting in the car for 30+ minutes every time, there&#8217;s something odd about employees having to pay to go to work. But depending on your <a href=\"https:\/\/compt.io\/blog\/unique-return-to-office-incentives\/\">return-to-office policies<\/a> or the nature of your industry, it could be a necessity for your employees to make the trek.<\/p>\n\n\n\n<p>To ease the burden on your people, parking reimbursement is a low-cost benefit that&#8217;s easy to set up. And it benefits your employees \u2014 you can exclude reimbursements from their wages (up to a certain amount).<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"what_is_parking_reimbursement\"><strong>What is parking reimbursement?<\/strong><\/h2>\n\n\n\n<p>Parking reimbursement for employees is a <a href=\"https:\/\/compt.io\/guide\/fringe-benefits-hr-guide\/\">fringe benefit<\/a> where employers pay back their employees for work-related parking expenses on a tax-free basis. Employees pay upfront for qualified expenses, submit a claim form, and then receive the repayment through payroll.<\/p>\n\n\n\n<p>Eligible expenses include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Parking fees, such as daily or monthly costs at a designated lot or garage<\/li>\n\n\n\n<li>Metered or timed parking on the street<\/li>\n\n\n\n<li>Parking expenses incurred while traveling for work<\/li>\n\n\n\n<li>Expenses for parking at a job site away from the employee&#8217;s regular workplace<\/li>\n<\/ul>\n\n\n\n<p>You can offer parking reimbursement as a standalone benefit, but most companies include it in a more comprehensive <a href=\"https:\/\/compt.io\/blog\/guide-to-employee-commuter-benefits\/\">commuter benefits<\/a> package.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"how_parking_reimbursement_works\"><strong>How parking reimbursement works<\/strong><\/h2>\n\n\n\n<p>Aside from the tax-related technicalities (more on that next), parking reimbursement is quite simple.<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Set an upper limit or a per-month\/reimbursement cycle cap.<\/li>\n\n\n\n<li>Create an enrollment form.<\/li>\n\n\n\n<li>Employees submit claims for their parking expenses (receipts, proof of payment, etc.) to HR.<\/li>\n\n\n\n<li>HR processes each claim.<\/li>\n\n\n\n<li>They disburse the funds through payroll (direct deposit).<\/li>\n<\/ol>\n\n\n\n<p>With a <a href=\"https:\/\/compt.io\/how-it-works\/lifestyle-benefits\/\">stipend platform<\/a>, the process is easy to manage (and, in some ways, automate).<\/p>\n\n\n\n<p>Psst: Our Compt platform can help you quickly and painlessly set up a parking stipend, plus more tax-compliant benefits, too. <a href=\"https:\/\/compt.io\/request-a-demo\/\">Get in touch with us<\/a> to find out more! &nbsp;<\/p>\n\n\n\n<div class=\"wp-block-media-text is-stacked-on-mobile has-primary-background-color has-background\" style=\"padding-top:var(--wp--preset--spacing--70);padding-right:var(--wp--preset--spacing--70);padding-bottom:var(--wp--preset--spacing--70);padding-left:var(--wp--preset--spacing--70);grid-template-columns:58% auto\"><figure class=\"wp-block-media-text__media\"><img decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/yH5BAEAAAAALAAAAAABAAEAAAIBRAA7\" data-src=\"https:\/\/compt.io\/wp-content\/uploads\/2024\/01\/compt-parking-stipend-example.png\" alt=\"\" class=\"wp-image-13164 size-full lazyload\"\/><noscript><img decoding=\"async\" src=\"https:\/\/compt.io\/wp-content\/uploads\/2024\/01\/compt-parking-stipend-example.png\" alt=\"\" class=\"wp-image-13164 size-full lazyload\"\/><\/noscript><\/figure><div class=\"wp-block-media-text__content\">\n<h3 class=\"wp-block-heading\" id=\"h-ready-to-set-up-a-parking-reimbursement-for-your-people\">Ready to set up a parking reimbursement for your people? <\/h3>\n\n\n\n<p>Our Compt platform can help you quickly and painlessly set up a parking stipend, plus even more tax-compliant benefits.<\/p>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link elementor-button wp-element-button\">Schedule a Demo<\/a><\/div>\n<\/div>\n<\/div><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"why_offer_parking_reimbursement_as_a_benefit\"><strong>Why offer parking reimbursement as a benefit?<\/strong><\/h2>\n\n\n\n<p>Well, for starters:<strong> the money<\/strong>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-parking-costs-add-up-fast\"><strong>Parking costs add up fast<\/strong><\/h3>\n\n\n\n<p><a href=\"https:\/\/www.bankrate.com\/finance\/credit-cards\/average-cost-of-commuting\/\">Bankrate<\/a> analyzed Americans&#8217; average commuting costs and found the typical American spends $8,466 per year on their daily commute (~19% of their annual income, on average).<\/p>\n\n\n\n<p>While some of that naturally goes toward gas and vehicle maintenance, parking fees are a not-insignificant part of the equation. Depending on your office&#8217;s location, you could be looking at anywhere from $150 to $300 per month or well over $300 in high-cost-of-living cities like San Francisco.<\/p>\n\n\n\n<p>If you have employees in New York City, Los Angeles, Washington D.C., or Boston, you&#8217;re likely looking at an <a href=\"https:\/\/www.chamberofcommerce.org\/costliest-commutes\" target=\"_blank\" rel=\"noreferrer noopener\">average of over $9,000<\/a> that your employees are paying! But this varies significantly by your employees&#8217; location. <\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>Even in a hybrid work model, daily parking adds up fast \u2014 so much so, that paying for a monthly parking pass is often cheaper, even if employees only come in a few times a week.<\/p>\n<\/blockquote>\n\n\n\n<p><strong>It helps with returning to the office.<\/strong> Many companies ask employees to <a href=\"https:\/\/compt.io\/blog\/return-to-office-mistakes\/\">return to the office<\/a> after working remotely during the pandemic. By offering parking reimbursement, parking becomes one less cost employees have to worry about.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-it-s-also-good-for-employee-retention\"><strong>It&#8217;s also good for employee retention<\/strong>.<\/h3>\n\n\n\n<p>Many see commuting as a tremendous inconvenience, and the cost greatly contributes to that. It&#8217;s part of why <a href=\"https:\/\/www2.deloitte.com\/us\/en\/pages\/about-deloitte\/articles\/workplace-flexibility-survey.html#:~:text=The%20findings%20indicate%20that%2094,of%20work%20and%20personal%20life.\" target=\"_blank\" rel=\"noreferrer noopener\">94% of workers<\/a> say they want more flexibility in how\/where they work.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-it-might-be-required-by-law\"><strong>It might be required by law.<\/strong><\/h3>\n\n\n\n<p>Certain states and cities have requirements regarding offering commuter benefits to employees that work in those municipalities. This list includes; New York City, New Jersey, Philadelphia, Washington D.C., Seattle, Los Angeles, Bay Area, San Francisco, Richmond and Berkeley, CA. <a href=\"https:\/\/dpath.com\/does-your-state-or-city-require-commuter-benefits\/\">This list is subject to change<\/a>, so ensure you review the regulations in the areas where your employees are located.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>That means <em>not <\/em>offering this benefit can be a deal-breaker for your employees. <\/p>\n<\/blockquote>\n\n\n\n<p>Getting sick and tired of paying for parking might be the final push someone needs to say &#8216;Yes&#8217; to that remote job offer or start replying to the recruiters flooding their LinkedIn DMs.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/yH5BAEAAAAALAAAAAABAAEAAAIBRAA7\" data-src=\"https:\/\/compt.io\/wp-content\/uploads\/2024\/01\/benefits-parking-reimbursement.png\" alt=\"why parking reimbursement stipend for employees\" class=\"wp-image-13163 lazyload\"\/><noscript><img decoding=\"async\" src=\"https:\/\/compt.io\/wp-content\/uploads\/2024\/01\/benefits-parking-reimbursement.png\" alt=\"why parking reimbursement stipend for employees\" class=\"wp-image-13163 lazyload\"\/><\/noscript><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"employee_tax_implications_of_parking_reimbursement\"><strong>Employee tax implications of parking reimbursement<\/strong><\/h2>\n\n\n\n<p>Parking reimbursement is considered a Qualified Transportation Fringe Benefit (QTF for short).<\/p>\n\n\n\n<p>According to IRS 2024 <a href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/p15b.pdf\">Publication 15-B<\/a>, the monthly exclusion limit for qualified parking is $315, an increase from the previous year&#8217;s $300. This means <strong>employers can exclude the covered cost of parking up to $315 per month per employee from their gross income<\/strong>, and it is not considered taxable income for the employee.<\/p>\n\n\n\n<p>Suppose the value of a qualified parking benefit received in any month is more than the limit. In that case, the excess amount must be included in the employee&#8217;s wages, minus any amount the employee paid for the benefit. The excess is subject to FITW, FICA tax and FUTA tax.<\/p>\n\n\n\n<p><strong>There is also a monthly exclusion of $315 for mass transit passes and commuter highway vehicle transportation. These two limits are separate and can only be used for their respective purposes.<\/strong>&nbsp;<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>While it&#8217;s a seemingly straightforward benefit, giving your employees a parking stipend can ease at least some of the financial burdens of commuting to work, whether or not they do it every day. <\/p>\n<\/blockquote>\n\n\n\n<p>With a flexible stipend platform, you could even broaden these benefits out to include reimbursement on vehicle upkeep or other daily costs.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-offer-a-parking-stipend-through-compt\"><strong>Offer a parking stipend through Compt<\/strong><\/h2>\n\n\n\n<p>As we&#8217;ve mentioned, you can use Compt to manage all your reimbursements, including employee parking and other commuter benefits. It&#8217;s 100% tax-compliant, so you can spare your back office the headache. <strong><a href=\"https:\/\/www.compt.io\/request-a-demo\">See how it works<\/a>.<\/strong><\/p>\n\n\n\n<div class=\"hs-cta-embed hs-cta-simple-placeholder hs-cta-embed-182042453609\"\n  style=\"max-width:100%; max-height:100%; width:1000px;height:250px\" data-hubspot-wrapper-cta-id=\"182042453609\">\n  <a href=\"https:\/\/cta-service-cms2.hubspot.com\/web-interactives\/public\/v1\/track\/redirect?encryptedPayload=AVxigLITvqgXk9NSwrza3wTRiqtR2zq78hFgwlUtGYzOiGijdBOhVWtIt%2Fjw%2FnPANyrnWEJXJ40OleXmqz4N4rwUrmZaAnePo1LmSmLZ16a8uwNm4wJ91DYmjr98IZiMKMWcZHoS3NvzfD7QFsRe2m%2BCJOEAvPDW0ObB15TgI%2BSuPIK9Z4mWzBrx8at2l6rIhJeqkHK5%2B3wVPhmSsD1%2B3VGkfVNhyr28kUpyYky4ieZnITAzgLpOc8ZHdiqnZ7j1QlK65Mop&#038;webInteractiveContentId=182042453609&#038;portalId=3919194\" target=\"_blank\" rel=\"noopener\" crossorigin=\"anonymous\">\n    <img decoding=\"async\" class=\"lazyload\" alt=\"generic-guides-demo-cta\" loading=\"lazy\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/yH5BAEAAAAALAAAAAABAAEAAAIBRAA7\" data-src=\"https:\/\/no-cache.hubspot.com\/cta\/default\/3919194\/interactive-182042453609.png\" style=\"height: 100%; width: 100%; object-fit: fill\"\n      onerror=\"this.style.display='none'\" \/>\n  <\/a>\n<\/div>\n\n\n\n<p><em>Editor&#8217;s Note:&nbsp;<\/em>This post has been recently updated for clarity and relevance for our readers.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>There&#8217;s no way around it: The work commute is a frustrating way to start (and finish) the day, especially if your office is in a huge metro area like LA, SF, DC, or Boston. (See this hilarious post from our Founder and CEO for the real-life struggles of a city commute!) Besides sitting in the [&hellip;]<\/p>\n","protected":false},"author":9,"featured_media":11136,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","footnotes":""},"categories":[28],"tags":[],"class_list":["post-3817","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lifestyle-benefits"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.1 (Yoast SEO v27.1.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Parking Reimbursement for Employees Explained [2026]<\/title>\n<meta name=\"description\" content=\"Discover all you need to know about parking reimbursements for employees. 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