pre-tax
The state of Illinois has passed a law known as the Transportation Benefits Program Act which will require some employers in the Chicago metropolitan area to offer pre-tax transportation benefits to their employees.
Cafeteria Plans allow employees to elect “qualified benefits” offered by their employer, and those qualified benefits may be paid for with pre-tax contributions by employees. Employees generally save on state income taxes, federal income taxes, and FICA taxes (i.e., Medicare and Social Security taxes). Employers also reduce their FICA taxes when a Cafeteria Plan is in place, so it is usually a win-win for all parties.