Tax Free Travel Passes
The Taxsaver Commuter Ticket Scheme is designed to help reduce the cost for workers using public transport. The travel ticket may be purchased from State Companies such as Dublin Bus, Bus Eireann, Irish Rail, Luas, Dart etc or from a licenced private transport operator including ferry services operating within the State. All employees of companies are eligible to participate in the taxsaver scheme once the commuter tickets are applied for and provided by the employer.
The most common payment option is for the employer to incur the full cost of the travel pass and the employee can agree to have his salary reduced by the equivalent amount. This is known as a salary sacrifice. Under the salary sacrifice arrangement, the employee’s PAYE, PRSI and USC are usually reduced by the value of the travel pass and a corresponding reduction in the employers PRSI as the amount of the salary sacrifice is deducted from the employee’s gross pay before calculating PAYE, PRSI and USC.
When applying for the scheme employees should choose the TaxSaver commuter ticket that suits their need best. Both the Employee and the Employer need to sign a contract setting out the terms of the TaxSaver scheme. The employer applies the required tax conditions and registers with the public transported provider. The employer must make the application on behalf of the employer and ensure to keep receipts for their tax records.
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