With petrol & diesel prices increasing since the recent introduction of a Carbon Tax in December’s budget, it may now be time for people to consider leaving the car at home & travel by bus or train to work.

There has never been a better time to do so as with the new incentive, The Taxsaver Commuter Ticket, you can save up to 51% on your bus or rail fare with tax & PRSI savings!  

A Dublin Bus monthly bus ticket would normally cost €98. This provides unlimited travel across the city’s bus network. However, you can get the same ticket for a little as €48.02. That’s less than half its original price!  Alternatively you can purchase an annual Dublin Bus ticket for only €480.20. This normally costs €980.

The same savings are available on monthly and annual on all Iarnród Éireann and Bus Éireann tickets as well as combined tickets with Luas services travel. Therefore, people nationwide can benefit with tickets for their respective local services.

The added incentive is that these tickets are not just for mid-week work travel! They are valid for the entire calendar month or 365 days with the annual ticket meaning you can use the same ticket at the weekends, with some ticket options even including Nitelink services!.

So how do you get these tickets & how do they work?

To qualify for The Taxsaver Commuter Ticket, you will need the support of your employer. You must order your ticket through your company and your company must be registered with Dublin Bus, or Irish Rail to offer the Taxsaver Scheme to its employees.  The savings are made as the cost of the ticket is deducted from your Gross salary and you do not pay tax or PRSI on the ticket cost. 

For Example: Gross Salary - €34,000, Annual Bus & Rail ticket cost- €1190. If you opt for an Annual Bus & Rail ticket, your taxable income is now only €32,810. You do not pay tax, PRSI and government levy on the €1190. *PRSI rates may vary depending on your contribution class

Example savings: 

So why should your employer take part?

This system benefits everyone as your company will also save 10.75% on Employer PRSI when you make this deduction from salary payments.

If the employee took €1090 in the form of extra wages or some other taxable benefit, tax at 41% would cost them €446.90. PRSI at 4% would cost a further €43.60. And combined the 2% Health Levy and the 2% Income Levy would take a further €43.60. So the €1090 in extra gross pay would translate into take-home pay of only €555.90.

The employer would also be liable for €117.18 Employer PRSI (10.75% of €1090).

Alternatively, the employee can get the full benefit of the €1090 in the form of an Annual Rail & Bus Pass and the employer saves that €117.18 as the benefit is not only exempt from benefit-in-kind tax but since it is not treated as wages, there is no liability for Employer PRSI either, yet the cost is an allowable expense of the business.

There are several ways employers can assist employees in receiving a Taxsaver Ticket:

Salary sacrifice – Deduct the cost of the ticket from their gross salary.

In place of a cash bonus – Deduct the cost of the ticket from their bonus.

Addition to salary – Provide the ticket as an addition to their current salary.

Salary sacrifice

Employees can reduce their gross salary by the cost of their chosen ticket and will therefore reduce the taxable element of their salary: 

Revenue terms and conditions apply.

The full text of the Revenue Commissioners Tax Briefing document on Taxsaver tickets can be viewed by clicking on the Revenue link below. http://www.revenue.ie/en/tax/it/leaflets/benefit-in-kind/passes.html

In place of cash bonus 

Employees can reduce their cash bonus and receive a Taxsaver ticket to the same value.

 Receiving a Taxsaver ticket in place of a cash bonus offers regular commuters an ideal tax saving method of payment.

Addition to salary

This is a popular option for employers involved in a staff retention process. It is also a great way of reducing the number of car parking spaces needed.  

For more information you can visit www.taxsaver.ie