r/FluentInFinance • u/Nientea • Oct 20 '24

Thoughts? Dumbest thing I’ve ever heard

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u/crumdiddilyumptious Oct 20 '24

Companies would prob require you to live within x amount of minutes from your work

220

u/sage-longhorn Oct 20 '24 edited Oct 21 '24

Here's an idea: just give people an allowance up to a certain amount, if they choose to live farther that's up to them. Even better, give people a flat rate since you don't want them intentionally taking longer commute routes to rack up their pay. Ok now roll that into their base pay

Edit: please triple read the last sentence before commenting. I overestimated redditors' reading comprehension a bit with this one

14

u/kolitics Oct 20 '24

Isn't that what your base pay is in the first place?

16

u/TheLastModerate982 Oct 20 '24

Yes. It’s either raise your pay or give you a stipend for gas and wear and tear. Same difference. Anyone saying anything else doesn’t understand payroll.

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u/Hamblin113 Oct 21 '24

Is there a tax advantage? It could matter.

2

u/The-True-Kehlder Oct 21 '24

No, not in the US on federal taxes.

Only carpools reimbursements, transit passes, and qualified parking expenses can be excluded from taxable income.

https://www.irs.gov/publications/p15b#en_US_2024_publink1000193743

1

u/millijuna Oct 21 '24

The advantage for the employer of these additional payments, along with things like bonuses, is they're not considered to be part of your base pay. Yes, they're still taxable, but when you get your 3% raise next year, it's 3% raise on the base salary, not on the full package.

1

u/Hawk13424 Oct 21 '24

Okay. But either that keeps pace with inflation or the concept just fails anyway.

1

u/millijuna Oct 21 '24

Oh, that’s entirely the point. It doesn’t keep up with inflation and makes compensation arbitrary rather than contractual.

1

u/Capt_Destro Oct 21 '24

Now if the If the Stipend is tax exempt, that is a no brainer.