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In most cases, the fare used to calculate the taxable value is the full Y fare.

Here's how it worked for me back in my nonrev days on CO:

Say that the Y fare for the trip in question is $1000, and that the employee pays a $100 fee for the pass.

$1000 - $100 = $900. 10 percent of $900 is $90.

$90 worth of income (imputed income) was added to the amount reported to the IRS. Therefore, if I were in a 33% marginal tax bracket, I would owe the IRS an additional $30 at tax time.

As the employee, the pass I provided to you eventually cost me $130 out-of-pocket.