Parking Services

Pre-tax Payroll Deduction

Federal tax law currently enables the University to structure the purchase of parking permits by employees as a qualified transportation fringe benefit on a pre-tax basis via payroll deduction. The "qualified transportation fringe benefit" rules are set forth in section 132(f) of the Internal Revenue Code as amended by the Taxpayer Relief Act of 1997.

Why should I take advantage of the Pre-Tax Payroll Deduction Parking Benefit?

This benefit could result in savings to individual employees by reducing the amount of federal and state taxes withheld from his/her pay. The employee can reduce the amount of pay subject to income and FICA tax withholdings, and increase his/her spendable income.

An employee's gross pay will not change, but his/her net pay will, due to the lesser amount of pay subject to tax withholding.

See Sample Calculations of Pre-Tax Savings .

Who is eligible for this benefit?

The pre-tax parking benefit is available to ALL faculty and staff who purchase parking permits through payroll deduction from the University, EXCEPT for the following:

  • Employees whose offices are located in leased office spaces and who currently purchase parking directly from the landlord.
  • Student employees.
  • Intermittent employees.

In cases where eligibility is questionable, Human Resources will make the final decision.

How often are deductions made?

A payroll deduction for a parking permit will be made the first and second pay period each month. During the year, a total of 24 deductions will be made for 12 month employees and 16 for 9 month employees.

For example:

  • If you are a 12-month employee and your annual parking permit rate is $24/year, then $1 will be deducted from 24 paychecks.
  • If you are 12-month employee and your annual parking permit rate is $75/year, then $3.13 will be deducted from 24 paychecks.

How do current employees enroll?

Annual enrollment is announced each Spring semester by email.

How do new employees enroll?

New employees should enroll within fifteen days of employment date. Deductions will commence with the next pay period after the enrollment date.

If you elect the pre-tax benefit to purchase your parking permit, you must complete the following forms and send/deliver them to Parking Services, G-01 Edgar Brown Union:

  • Pre-Tax Payroll Deduction Parking Benefit Enrollment/Change Form

How do I elect to discontinue the pre-tax benefit?

If you elect to discontinue the benefit, you must present the completed and signed form (below), along with your current valid parking permit, to Parking Services. The form must be processed and approved by Parking Services before Human Resources will process the change to stop deducting for this benefit.

See Pre-Tax Payroll Deduction Parking Benefit Enrollment/Change Form.

Since the benefit is on a pre-tax basis, are tax-deferred contributions affected?

If an employee is contributing at or near the maximum amount to a supplemental retirement income {IRC 401(k)}, a tax sheltered annuity {IRC 403(b)}, or a deferred compensation plan {IRC 457}; the employee may need to decline the pre-tax parking benefit or adjust his or her tax-deferred contribution because participation in the pre-tax parking benefit reduces the income available for sheltering under those plans. Social security earnings upon retirement may also be marginally affected due to the reduced social security contribution. Employees should consult their tax advisors with questions.