Expenses and benefits: public transport
What to report and pay
If the public transport costs aren’t exempt, you may have to report them to HM Revenue and Customs (HMRC), and deduct and pay tax and National Insurance.
Season tickets provided for employees
This also includes any other public transport vouchers you provide to employees.
You must:
- report the cost on form P11D
- add the full cost to their earnings and deduct Class 1 National Insurance (but not PAYE tax) through payroll
Season ticket costs reimbursed to employees
This covers arrangements where your employee buys their own season ticket but you reimburse them or cover their costs with an allowance or salary increase. This counts as earnings, so you’ll need to:
- add the cost to your employee’s other earnings
- deduct and pay PAYE tax and Class 1 National Insurance through payroll
Loans made to employees to buy season tickets
You should treat this as you would any other loan made to an employee.
Salary sacrifice arrangements
If the public transport costs you pay are less than the amount of salary given up, report the salary amount instead.
These rules don’t apply to arrangements made before 6 April 2017 - check when the rules will change.