# Pre-Tax Savings Example

The following are examples showing the benefit of pre-tax savings for a reserved parking permit that cost \$100 per year in 2003-2004 and will cost \$137 per year in 2004-2005:

• An employee in the 10% Federal tax bracket purchasing a \$137 reserved parking permit would save \$32.40 per year in taxes, or \$2.70 per month. The net out-of-pocket cost for the reserved parking permit for the employee would be \$104.60 calculated as follows:
• \$137 permit fee times 10% Federal tax = \$13.70 tax savings
• \$137 permit fee times 7.65% Social Security & Medicare tax = \$10.48 tax savings
• \$137 permit fee times 6% percent State tax = \$8.22 tax savings
• Total Tax Savings: \$32.40
• An employee in the 15% Federal tax bracket purchasing a \$137 reserved parking permit would save \$39.25 per year in taxes, or \$3.27 per month. The net out-of-pocket cost for the reserved parking permit for the employee would be \$97.75 calculated as follows:
• \$137 permit fee times 15% percent Federal tax = \$20.55 tax savings
• \$137 permit fee times 7.65% Social Security & Medicare tax = \$10.48 tax savings
• \$137 permit fee times 6% State tax = \$8.22 tax savings
• Total Tax Savings: \$39.25
• An employee in the 25% Federal tax bracket purchasing a \$137 reserved parking permit would save \$52.95 per year in taxes, or \$4.41 per month. The net out-of-pocket cost for the reserved parking permit for the employee would be \$84.05 calculated as follows (assuming the employee does not exceed the FICA wage base of \$87,900 in 2004):
• \$137 permit fee times 25% Federal tax = \$34.25 tax savings
• \$137 permit fee times 7.65% Social Security & Medicare tax = \$10.48 tax savings
• \$137 permit fee time 6% State tax = \$8.22 tax savings
• Total Tax Savings: \$52.95