Introduction to this document

Season ticket loans policy

Travelling to work by public transport is costly and therefore many employers provide season ticket loans. This enables the employee to buy an annual travel ticket paid for by their employer but with the cost then deducted from their wages in equal, usually monthly, instalments.

A repayable loan

Our Season Ticket Loans Policy can be inserted into your staff handbook where you provide this discretionary benefit. Whenever cheques for season ticket loans are provided, it’s always advisable to ensure they’re made payable to the transport operator rather than to the employee. That way, you know the cheque is being used for its intended purpose. However, many transport operators no longer accept company cheques or bankers’ drafts, so in this case you will need to make arrangements to pay for the season ticket in an alternative way. For example, there is now a season ticket rail warrant scheme in place which allows you to purchase rail season tickets for staff. Under the scheme, you issue a rail warrant to the employee from a warrant book which is supplied to you when you open an account and they then exchange this for a season ticket at a staffed National Rail station. It will also be necessary for you to draw up a written agreement with your employee to ensure that deductions from their wages to recover the loan are made lawfully. It’s recommended that your agreement makes it clear that if the employee leaves employment before the loan has been fully paid back, you can recover the outstanding balance by way of deduction from their final salary payment.