A travel allowance is a great way to make a significant difference to how staff travel to and from work. It shows that your organisation is genuinely committed to enabling active travel, and willing to support it financially.
A travel allowance is an after tax payment made to eligible employees for the days they travel actively to and from work.
Employees are often encouraged to drive a car through a range of direct or indirect financial incentives, such as salary packaged vehicles and free or subsidised car parking, but there is usually no equivalent incentive to walk, cycle, take public transport or carpool. Providing staff with an active travel allowance can help to equalise these options and allow people to make real choices.
Tips to implementing a successful travel allowance:
- The allowance amount should be equal to or greater than the benefit of free parking or the cost of a public transport fare (in order to be a real incentive!).
- The travel allowance needs to be an after tax payment in order to avoid fringe benefits tax. It usually goes directly into staff bank accounts with each pay.
- It’s important to have a clear framework with guidelines of how the allowance will work in your organisation, including who can apply, if proof of travel is required, maximum amounts to be claimed, etc.
- A travel allowance will be most effective when it’s combined with a package of activities, including looking at how you manage parking at your workplace. Parking that is limited, is at a cost to users, and is allocated based on need will support the success of the travel allowance.
- Staff are usually required to forgo parking privileges to access the travel allowance. You may like to have a plan in place for unusual work hours, unexpected commitments or emergency situations (e.g. temporary parking permit, guaranteed ride home using taxi or other on-demand transport).
- Keep it simple! Try to keep the process as easy as possible, both for staff applying for the allowance and the administrative work behind the scenes.
- Pilot the allowance, review and make any changes.
See our resource on implementing an incentives scheme in your workplace for other options of how to encourage active travel through providing employee incentives.
St John of God Hospital in Subiaco has a Travel Green Allowance of $6 per day for permanent staff who walk, cycle, catch public transport or travel as a passenger in another vehicle. Staff are required to forgo their discounted parking rates. The Travel Green Allowance is supported by good public transport access and good end of trip facilities, and towels and toiletries provided to staff.