Wellington commuters could save 30% on public transport under new tax-free scheme

Author: Janhavi Gosavi,
Publish Date: Thu, 11 Jun 2026, 3:29pm

Wellingtonians could save hundreds a year on public transport thanks to the roll-out of a tax-free scheme across the capital - if their employers opt in.

Greater Wellington Regional Council is introducing the public transport scheme, saying users could save about 30% on their daily commute, potentially $900 annually per commuter.

The council has partnered with fintech business Extraordinary which has created a payroll-based scheme that helps workers cut down on transport costs.

It comes a day after Labour announced its campaign promise to cap public transport fees at $20 per week for Wellington, Auckland and Christchurch.

Employers could opt into the tax-free scheme, which takes a portion of an employee’s pre-taxed income and puts it on a card dedicated to paying bus, train and ferry fares.

Extraordinary's card can be used to tag on and off buses and purchase monthly passes for trains and ferries.

“This could really make a meaningful difference to a lot of Wellingtonians,” council chairman Daran Ponter said.

Employees could choose to reduce their gross salary by the amount they wanted to allocate towards public transport costs.

Their employer would then put that amount on to their card each pay cycle, making it exempt from normal PAYE income tax.

The scheme enabled employer-provided public transport to also be exempt from the Fringe Benefits Tax, which employers normally have to pay on any non-cash perks they provide to employees, such as gift cards or company cars.

It followed a binding ruling made by Inland Revenue in Extraordinary’s favour last year, which allowed employees to fund public transport through their pre-taxed income.

For every $50 of pre-taxed income that is deducted, it technically only costs the employee $31 of take-home pay, Extraordinary chief executive Steven Zinsli explained.

“By making a pre-tax deduction, you’re essentially spending a lower amount out of your salary to get a higher amount of money,” he told the Herald.

Ponter said Extraordinary had achieved what Metlink had tried to accomplish for four years.

The Extraordinary transport card can also be loaded onto smartphone digital wallets to be used for contactless payments.

From today, Metlink passengers can use the Extraordinary card to tag on and off buses, and purchase monthly passes for trains and ferries.

The card can also be added to digital phone wallets and used for contactless payments on public transport, similar to a debit card.

The council is pushing for employees to ask their workplaces to opt-in to the scheme.

Deloitte, Victoria University of Wellington, Kiwibank and Hutt City Council, along with Greater Wellington Regional Council, were some of the Wellington-based employers who had already opted into the scheme.

Workers could save about 30% on travel, which the council hoped would encourage more people to choose public transport “over the cost and hassle of finding a car park”, public transport committee chairwoman Ros Connelly said.

Fintech company Extraordinary chief executive Steven Zinsli said Extraordinary could save employees up to $900 annually.

Zinsli said the scheme would help get more workers back into offices and aid companies in reducing their carbon footprints.

He estimated the scheme could save a public transport-user more than $900 per year, which could equate to a month’s worth of groceries or a few power bills.

The scheme costs employers $50 per employee per year but they do not have to pay Kiwisaver contributions on the pre-taxed income allocated to Extraordinary.

If employees allocated at least $28 per week, Zinsli said the scheme would become cost-neutral for employers.

“There’s no reason not to offer it.”

Janhavi Gosavi is a Wellington-based journalist for the New Zealand Herald who covers news in the capital.