Hawaii voluntary transportation benefits program
Pre-Tax Transportation Benefit Pilot Program (PTBP)
The Pre-Tax Transportation Benefit Pilot Program (PTBP), launched in 2013, allows covered employees to exclude from taxable wages the costs incurred for transit passes, vanpool charges, and bicycle commuting expenses—up to the maximum amount allowed by federal tax law.
Covered employee:
Employees of the State Executive Branch (excluding the University of Hawai‘i and Department of Education) who are eligible to participate in the State of Hawai‘i Employees’ retirement system, who live and work on Oahu, and who do not have parking in a State-controlled lot with a parking payroll deduction.
Covered employer:
Any person, including corporate officers or executives, who directly or indirectly or through an agent of any other person, including through the services of a temporary service or staffing agency or similar entity, employs or exercises control over the wages, hours, or working conditions of an employee.
If you commute using TheBus, TheHandi-Van, or a vanpool, you may authorize the State to deduct your transit costs from your paycheck on a pre-tax basis. Payroll deductions are made on the 20th of each month to pay for a transit pass for the following month (e.g., a July deduction covers an August pass).
Currently, only regular monthly bus passes are available. Additional options may be offered as they become available through the HOLO Card system or vanpool provider.
Eligible employees may enroll at any time by submitting the State of Hawai‘i Pre-Tax Transportation Benefit Pilot Program Employee Enrollment Form to their Department Coordinator. Forms are available from your Coordinator or can be downloaded from the DHRD website.
Want to know more about the transportation program in Hawaii, or want to start offering transportation benefits to your employees?
No penalties. This program is voluntary.
For Hawaii, the nationwide IRS tax-free limits for commuter benefits apply. For 2025, employees can allocate up to $325 per month for transit and $325 per month for parking, reducing taxable income.
- Pre-tax savings: Employees can lower their taxable income by setting aside funds for transit and vanpool expenses.
- Employer tax benefits: Businesses save an average of 7.65% per employee on payroll taxes.
- Direct transit subsidies: Employers can provide up to $325 per month per employee in tax-deductible transit benefits.
- Additional incentives: Some cities and states offer grants, tax credits, or subsidies for implementing commuter benefit programs.
