In this section:

  • Expenses and benefits A to Z

Public transport

This guide explains your tax and National Insurance contributions (NICs) obligations if you contribute to an employee's public transport costs.

On this page:

You provide a season ticket to an employee

Definitions or restrictions

Covers season tickets or any other public transport vouchers you provide to an employee.

What to report, what to pay

For employees earning at a rate of less than £8,500 per year:

  • report on form P9D - section B
  • add the value of the benefit to your employee’s earnings when deducting and paying Class 1 NICs (but not PAYE tax) through your payroll

For company directors or employees earning at a rate of £8,500 or more per year:

  • report on form P11D - section C
  • add the value of the benefit to your employee’s earnings when deducting and paying Class 1 NICs (but not PAYE tax) through your payroll


Work out the value to use

The value to use is the cost to you of providing the ticket or voucher.

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You reimburse the cost of a season ticket

Definitions or restrictions

Your employee pays for their public transport season ticket, but you either:

  • reimburse their costs
  • provide them with an allowance or a salary increase to cover their costs

What to report, what to pay

These payments count as earnings, so:

  • add them to your employee's other earnings
  • deduct and pay PAYE tax and Class 1 NICs using your usual payroll procedures

Work out the value to use

The value to use is the amount that you pay towards your employee’s costs.

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You provide a loan so an employee can buy a season ticket

Definitions or restrictions

You provide a loan to your employee to enable them to buy a season ticket and any of the following applies:

  • the loan is interest-free
  • it’s at an interest rate that’s lower than HM Revenue & Customs’ official rate of interest
  • you write any part of the loan off

What to report, what to pay

Provided the combined outstanding value of your loans to the employee is less than £5,000 throughout the whole tax year, you have:

  • no reporting requirements
  • no tax or NICs to pay

Loans provided to employees - find out more

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You pay for subsidised or free public bus transport

Definitions or restrictions

You pay a subsidy to a bus operator (or to a body such as a public transport authority, which then distributes the money to a bus operator) to help finance a local public bus service that is potentially useful to your employees. For example, a bus route that stops outside your workplace gate. In return, your employees get free or reduced-rate transport on the supported route.

The service is used by your employees at least partly for any of the following 'qualifying journeys':

  • between home and workplace (including journeys only completed partly by bus)
  • between workplaces (again, including journeys only completed partly by bus)

What to report, what to pay

Provided the above conditions are met you have:

  • no reporting requirements
  • no tax or NICs to pay

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Where to report - understanding the £8,500 threshold

It’s important to choose correctly between forms P11D and P9D for each employee. The form to use depends on the whether the employee is a director of your company and on whether their earnings are above or below an annual rate of £8,500. For more information - including details of what’s included in the £8,500 threshold - follow the link below.

End-of-year forms at a glance

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Technical guidance

EIM06300 - Employment income: season tickets provided; liability to tax

NIM02335 - Class 1 NICs : Earnings of employees and office holders : Season tickets

EIM21855 - Particular benefits: exemption for subsidies to public bus services

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