The IRS sets the employee mileage reimbursement rate for employees who drive their personal vehicles for work purposes (they also set rates for charitable, medical, and moving purposes). The rate is intended to be a guideline for employers and a tax deduction opportunity for employees.
What sometimes confuses people about this is that the IRS sets an employee mileage reimbursement rate, but the FLSA does not mandate reimbursement by the employer. So what’s the deal? Do employers have to reimburse employees? And what rate should they use?
Do Employers Have to Reimburse for Mileage?
Many employers think they have to reimburse mileage but, in reality, they probably don’t. Employers are free to reimburse more or less than the IRS rate as long their state doesn’t have its own requirements and as long as any lack of reimbursement does not cause the employee’s wages to fall below minimum wage.
Should the Employer Reimburse?
- Employees appreciate it – Even though it’s legal to reimburse less than the IRS rate, employees don’t usually appreciate it. Gas costs and repairs are out of pocket expense. If employees get paid back for those expenses only once a year (at tax time), this may put a lot of strain on them.
- Employee retention – If employees feel they are being treated fairly, they’ll usually stick around longer.
- Can’t claim the deduction – Most low wage employees don’t itemize deductions and can’t claim the deduction.
- It’s most common – Most businesses do reimburse employees. A BLR Survey found that 73% of respondents actually reimbursed employees the max IRS rate.
How Do Employees Get Reimbursed?
Even if you don’t reimburse your employees, those that itemize deductions and drive a significant amount can recover the costs on their taxes.
The amount the employer does not reimburse is the amount employees can deduct on their taxes. If employers reimburse more, however, which is perfectly acceptable, employees have to claim this mileage excess as wages on their taxes.
Note: Mileage can only be deducted if it exceeds 2% of the tax payer’s AGI. This means that employees who don’t drive a considerable amount can’t take the deduction. Additionally, employees who don’t itemize deductions also can’t take the deduction. If employees can’t claim the deduction on their taxes and employers don’t reimburse, they have no way of getting reimbursed!
Calculate and Track Employee Mileage
Calculating mileage payments and keeping track of mileage is a challenge that online tracking apps help manage.
For employers
Reimbursing mileage with expense software like Timesheets.com allows employers to use whatever rate they like. After the employer sets up the rate in the system, employees enter their miles, and the software calculates the total. Then, at the end of the year, employees can run reports on paid expenses to calculate their expected tax deductions.
For employees
Employees need to keep track of their mileage for tax purposes. Apps like these help employees do that. If not using an app, they should be sure to keep all the necessary records on their mileage log.
197 Responses
My question is this my employer pays monthly mileage reimbursement but pays me at or less than the IRS recommendation and also taxes my mileage reimbursement and also rolls it into my W-2 at the end of the year… Is that right?
An Auto Allowance ( generally a fixed amount paid per month to an employee regardless of your specific expenses) is considered a fringe benefit and is a taxable wage reported on your W-2. A mileage reimbursement (an amount calculated based on your specific miles traveled) should NOT be taxed on your check nor should it be reported as taxable wages. on your W-2. As both the employee and employer have to pay taxes on taxable wages, it does not benefit either of you for your employer to tax you on a reimbursement payment.
My employer paid me .35$ a mile and the federal maximum is around .55$ a mile. Can I claim the difference on my taxes? My tax guy did this for me saying it was right and now the irs is auditing me for it back, is this right?
Unless your state has reimbursement laws, your employer can reimburse you any rate that they please. The IRS rate is just a guide for employers, but they can either reimburse employees higher or lower than the IRS rate. If your employer reimbursed you $0.35, that’s what you should have claimed. I would suggest speaking with your tax accountant.
My employer only pays us 0.14 per mile traveled for delivering pharmaceutical equipment and meds in our personal vehicles all over Georgia. And the way they do it is by the calculating our mileage from the pharmacy to the farthest place we travel on the route but not the distance to each place to the next. He doesn’t want us to file our mileage reimbursement on our taxes. I want to know Georgia’s law on the required mileage pay for using your personal vehicle to deliver packages for the company.
My employer gives us a company car which is a Nissan Versa and reimburses us $0.11 per mile. They only reimburse us when we go to clients homes but we don’t get reimbursed to come to the office which is 50 miles from my home and some days I only am at the office. So 100 miles on some days. Is this fair? Recently they messed up on the mileage and we got a bigger check but we have to pay it back and I didn’t get paid for mileage because the pay back was more than my reimbursement. Maybe it’s just me but that doesn’t sound right.
First, I want to mention that some states have their own regulations, so you may want to check with your local labor board so you can better understand your reimbursable expenses. The IRS states that employers do not have to reimburse employees when they travel from their residence to their first official work station. You potentially may be entitled to the IRS 50 Mile Offset Rule, but I would suggest speaking with someone to see if you qualify.
I run a pet sitting service and am unclear as to if I only reimburse my employee for mileage between homes or also from her home to the homes we service as well. What do I do?
From my understanding if she has no office other than her house then you would have to pay her from the first house she stops at for the day to the last one. The travel from her house to the first client, and from the last client home is on her. It’s a sticky thing sometimes and to get absolute clarity on the issue for your area it would be best to contact your tax adviser or local state taxation and revenue department. Also many states will have taxation and revenue seminars for small businesses free or low cost.
I have a maid service in Atlanta GA. We reimburse $10 a day for the driver for simplicity.
We do not pay for wear and tear of the car.
You can also go to mapquest and calculate their route. You will see their actual gas cost. If they are leaving from the office you can start calculating there. If they do not have to return to the office at the end of the day, then the calculation stops a the last job of the day.
Wow! Is that even legal in your state? Even though the federal law doesn’t mandate anything most states require employers to reimburse employees for all costs, including depreciation, which can be massive. 10 bucks might just cover gas for the day. You are short changing your employees big time. Hopefully, they are deducting tons on their federal tax returns. How little you pay your employees, they may deduct so much that they still lose since their effective tax rate could be zero but could have gone much further if not for the lack of funds.
Right. My company only gives us $3 hour for mileage and we use our own cars
Cheap! No wear or tear and tracking mileage! I wouldnt work for people that dont care. I agree with Joe! And to proudly post that is terrible.
We paid for the fuel for our employee traveling to a seminar. How much should we pay for mileage?
Hi Carole,
You could calculate the mileage based on the current IRS rate, which is .56 cents per mile, subtract the amount you already gave her, and give her the difference.
My employer is adding my non taxable mileage to my salary to make my gross income before taxes. Is that right? Or should they add mileage after taxes in my salary?
Reimbursement for miles is generally not taxable, but you should consult an expert in your area to be sure.
We have several golf courses and I would like to know how to reimburse an employee who uses their own Golf Cart form location to location. It gets about 30mpg. We reimburse our employees who use their own cars the standard IRS rate. I don’t think we should reimburse a golf cart the same as a car. We don’t have a policy currently in place. Thoughts?
That is an interesting situation. You could ask the same question about employees using the Prius. Electric cars could change the whole reimbursement playing field.
Ultimately, though, what you reimburse is completely up to you. If you don’t wish to reimburse for mileage, you don’t have to. Or if you wish to reimburse less that is your freedom. Your employee can claim the unpaid mileage on his taxes. The only possible caveat is that your employee may not be very happy with you and might leave the company.
The employee should not be penalized for driving an economic vehicle. Are you going to pay the employee who drives a 4 wheel drive pick up more because he only gets 11 miles per gallon?
Our state does not mandate that we pay mileage at all. I do just because it helps attract and retain workers. I have done mileage in the past and they were only compensated much less than $10 a day on most day. On very few occasions when I tried to pay per federal mileage amounts that they went over $10.00.
If an employer provides a partial reimbursement for mileage to the employees, does that employer also claim that mileage when they do their taxes and do they get the full reimbursement from the IRS?
In other words, is the employer pocketing the difference if they can claim all the employees mileage?
Check with your CPA for full details of business expense deductions.
What if my employer gives 16.c / mile and the balance I will have to claim is more than my gross pay per year,,I am a pharmacy courier
What is the average reimbursement for employees?
How often should I reimburse employees for their mileage? Currently it works out to be once a month on average, but occassionally is more often than that. It seems excessive.
My current employer reimburses with bi-weekly payroll. Mileage is included in the payroll check. Mileage is tracked on the timesheets. My previous employer paid out mileage on non payroll weeks as a separate expense check. That system tracked mileage as and expense not as time. in either case it worked out to approximately 26 weeks a year or twice a month.
my employer pays .33 cents per mile i travel for work. The IRS standard is .55. When i file my taxes will i be able to get the difference for miles traveled?
Yes you will!
I work delivering pizza and paid as a tipped delivery driver. Is there a mandatory mileage to be paid to drivers? I’m using my own vehicle.
Angel,
There is no federal law mandating that an employer pay delivery drivers. Many pizza places choose to pay their employees some kind of mileage reimbursement as a benefit but it is not required in most states. You will want to keep very accurate records of your mileage – write down the mileage at the beginning and end of each delivery – and then claim whatever was not reimbursed by your employer at the end of the year.
Is the amount reimbursed for using an employee’s own car considered to be taxable income, and as an employer do I have to include it on my employee’s W2?
It depends on how much you reimburse the employee. If you reimburse up to or below the federal mileage rate, then it is not considered taxable income. If you reimburse above, then it is.
Currently our small company does not offer any reimbursement for mileage. We are growing and now have several locations in the state and our managers have responsibilities to visit each location frequently. If we did institute a mileage reimbursement, is there any difference between who we reimburse (managers vs. front line staff)? At this point, it’s the company culture that believes that if you are salaried and a manager, you are EXPECTED to bear the cost of driving your own vehicle. Also, if we did start expensing miles, do we have any increase in liability for our drivers? Do we NEED to verify valid DL’s and that our employee have valid auto insurance? Thanks for your reply!
Hi Nikki,
Employees and managers alike can claim mileage as a business expense. Whether the employer chooses to reimburse is up to the employer. No person working for a company and driving his/her own vehicle for business purposes should have to bear the cost of gas, wear, and tear.
If the employees are driving, then you should verify they have a valid DL as well as insurance. Also, aside from workers comp insurance, you also need to have general liability coverage in the event there is an accident where your employee is at fault and a suit is filed against the company. Workers comp only covers medical costs, and even though they have insurance, as the employer, you can be liable for any damages as well if the accident occurred on company time/business.
If you are required to use your own vehicle for work and get reimbursement at the Federal amount, can your employer require you to have a vehicle 5 years or newer or they won’t reimburse? Talking about mileage of 1,000 per week is possible.
Noel,
Remember, employers don’t have to reimburse mileage if they don’t want to. If they don’t, you can deduct the mileage on your taxes. Please read this article: http://blog.timesheets.com/2012/07/03/employees-can-deduct-the-mileage-employers-dont-reimburse/
If your car is old and you do not have good gas mileage, you will be the one losing, and not your employer (or the IRS). i.e. your reimbursement will not go as far.
Now, I can see how your employer would require a newer vehicle for reliability. That is up to the employer’s discretion.
“There is no law mandating how much or how little to reimburse employees.” There may not be a federal law but states do have laws. For example, the California Labor Code provides that “[a]n employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer[.]” Cal. Lab. Code § 2802(a). An employee may not waive her right to reimbursement: under California law, any contract or agreement by which an employee purports to waive the right is void. Cal. Lab. Code § 2804. This has been interpreted to require employers to reimburse mileage at an amount of actual expense. Parties can agree to a lower than IRS rate as long as it represents actual expense.
Did you ever get an answer?
i am employed with an agency for over 14 years. I am getting mileage reimbursement but the agency i work for was my base station (the main office) for fourteen years. Now i was given a new base station which I have no reason to go there for anything. I have to deduct a round trip mileage after each of my visits going to see clients from the new assigned base station which is 22.5 miles. Is this legal to do to an employee.
In most states, the business can choose to reimburse what they choose so it is fine that they use their new base station as a starting point.
In order to know what is accurate for your tax deductions, though, you should write down your odometer reading each time you drive for the company. So if you leave the (old) base station and head out to your jobs, write down the odometer reading from that location and then again when you return to it. Don’t worry about the new base station which you never visit.
If this is how your company wants to calculate it, that’s fine. But for your own purposes, you need to keep track of the actual mileage.
For more information on deducting mileage on your taxes, take a look at this post. http://blog.timesheets.com/2012/07/03/employees-can-deduct-the-mileage-employers-dont-reimburse/
I work for a oilfield service company that charges $2.00 pr mile on my personal car but only reimburses me $0.56 . keeping the other $ 1.44 , is that legal can they do that.
Jack,
I don’t understand.Your company charges you to use your own car? Can you clarify please? Thanks.
Seems like what she’s saying is, they’re charging the client $2.00 for the business service but only reimbursing her at the IRS rate, which again is their prerogative. I would think she can either tell them to rent her a car to do the work or claim it again on her taxes even though she’s reimbursed, whose checking?
Tell them to rent you a car or use a company vehicle and get a gas card from them as well OR claim it again on your taxes even, whose checking? Im just saying
I travel from Lafayette la to Venice la on the end of the delta. total round trip is 465 miles for my job… on my service ticket i charge shell oil $2.00 pr mile = $ 930.00 and we get $0.56 pr mile only receiving $260.40……they profit off my truck $670. said it was for insurance purpose but theirs doesn’t kick in till ours is depleted.
Would the mileage deductions (federal tax) be available to all tax-payers? Or, does it only come into play when a tax-payer itemizes?
From the IRS website: “Generally, if you are an employee, to deduct your car expenses including expenses that exceed reimbursement under an accountable plan, you must complete Form 2106 (PDF) or Form 2106-EZ (PDF) and itemize your deductions on Form 1040, Schedule A (PDF).”
Is there any loophole that states you can claim round trip mileage even if you’re only driving one way? My boss always claims round trip from the office to the bank each day, but actually only goes a couple of miles out of her way on her way home. She says this is legal. Yes or no?
Julie, as far as the IRS is concerned, if mileage is going to be claimed, it needs to be documented – mileage records need to be kept.
My employer informed us that he is not going to pay us by getting lost while we are trying to reach locations. Is this legal? In fact, he is telling us that we need to change/alterate our own odometer in order to fit the “new rule” accordingly. Is this legal?
Jason, I would suggest speaking with a lawyer. Most lawyers are happy to give a few minutes of free advice if you don’t already have an established relationship with one.
Do employers typically pay for drive “time” in additon to mileage? We have a courier who visits each of our offices to pick up mail, etc. The offices are quite a distance from each other, so there is considerable drive time (like two plus hours), but she only spends about ten minutes at each location.
To my knowledge and from my own experience, employers typically pay employees as though they are on the clock while driving errands. It would depend on the nature of the errand and the type of work.
Of course they pay for drive time “reimbursement ” is just what it sounds like, she spent money out of her own pocket for your company’s benefit. Isn’t her time worth something too ! Corporate America wants it all AND FOR FREE.
I travel for a company and carry all the supply’s in my car 7 days a week. They give me .46 a mile and use orbits for business. I was told by h and r block i couldn’t get reinbursed because it was not a government site. That only government employees can claim the diff of .46 to the .56 difference. Is this true? I drive almost a 1,000 miles per week in my own car. Should i be going else where to do my taxes?
My Company pays me .55 a mile. but deducts the amount of money i buy in fuel on the trip on the company card. For example, .55 X 2.026 = 1,114.30. Then they deduct the fuel, $306.43. Total $807.87. Can I claim the fuel as a deduction? or the mileage that it would take to reach 306.43?
If an employee makes minimum wage, doesn’t the driver reimbursement need to be at the IRS current rate.
Lance,
The IRS rate is a guideline for employers and the rate at which employees can claim deductions on their taxes. If you are still uncertain of how this works, speak with an accountant or tax specialist.
Is it legal for a company to pay some employee’s a higher mileage rate than to other employee’s? It seems everyone should be paid the same rate?
Dee,
While it may not seem fair, the IRS rate is just a guideline. If your employer pays you less than the IRS rate, feel free to deduct the remainder on your taxes. But be sure to keep records!
In your own experience, what is more beneficial to deduct my miles from my taxes or my employer get me pay $ 0.55 for miles.
I think this is very little comparing for all the wearing up and the risk of using my car.
Thank you
Hi Martha,
In this post http://blog.timesheets.com/2014/03/20/gas-costs-are-covered-in-mileage-reimbursement/ I outlined just how much gas and wear and tear a person could expect to pay for with the 55 cents credit per mile. It really does looks sufficient to me after thinking it over. Let me know what you think.
Whether it’s best to receive the reimbursement in your tax refund or in your regular pay check depends on the situation. For someone who is barely scraping by, paying for gas costs out of pocket each week could be really hard.
Can taxes be taken out of my mileage reiembersment checks
They can. It depends on whether the employer is making payments according to an accountable plan. It would be best to check with a CPA or even your employer’s payroll company.
I have several case workers who travel throughout the day. One worker lives out of town, but comes in to the main office each morning. She usually has cases lined up in the evening in her hometown. Do I pay her mileage for leaving the office and going to her hometown since she would be traveling that way anyway?
What a good question! As the IRS would see it, she is technically driving for work purposes while at work. This would make these miles deductible on her taxes. Whether you want to reimburse her for this, though, is ultimately your decision. As long as it doesn’t cause any hard feelings, it may be fine not to. But if other employees are having their miles reimbursed, she may feel she’s getting shortchanged. Whatever you decide to do, she should be aware that she can claim this mileage deduction (as long as she keeps records), which might be a pretty big chunk for her.
I pay an hourly wage to my employees only when they are with a client, but i pay them mileage to get to next client. Is this right to do?? I am in CA if that makes a differene.
Thank you,
Stacy
Hi Stacy. I don’t want to give you any legal advice on your particular situation, but please take a look at this article and check the DOL link provided. This will give you more information on the topic. If you’re still uncertain, please check with your lawyer.
http://blog.timesheets.com/2011/06/24/time-on-the-clock-waiting-time-on-call-time-travel-time/
I have been traveling 2 days a month for my employer for the last 7 months. I leave from my home but my mileage is from my main work place. I am not on the clock when I travel to the location but I am paid for the mileage from the main work location( about 30 miles there and 30 back). When I get to the travel location, I clock in. When I depart the travel location and drive back to the main location, I am on the clock and paid the mileage. My employer recently told me I could not do this (which is what they told me to do in the first place) Is there some law or tax implication that is effecting this decision?
Hi Kristen. If you are leaving the main office to travel to a work related site then you are still technically at work and do need to be paid at least minimum wage. Have you seen this post? It might help you understand how it works. http://blog.timesheets.com/2014/05/15/travel-time-should-be-paid-work-time/
However, if you are leaving your home and going straight to an office that happens to be further away, you do not need to be paid for that time.
I have a question on mileage reimbursement for employees that travel to multiple destinations throughout the course of their business day. As we are not able to reimburse for their commute to and from work, my question primarily deals with their return travel at the end of the day to their home residence.
For instance if the last site the employee visits is 40 miles from home, we typically would not reimburse them for their commute. However, since their job took them so far from home and increased their commute would it be fair to reimburse them for a portion of their commute home?
I was thinking if it took them 10 miles for their commute to work, but the last job of the day has them 40 miles from home; I would reimburse them for 30 miles which would deduct 10 for their standard commute. What are your thoughts?
Thank you
I’m glad you asked! I have heard employees complain about this very thing before. When they don’t get reimbursed for those extra miles that a business trip put them out of the way from their house, they feel cheated. And I can understand why! If the employer sends you 30 miles out from your work place, it seems he should bring you back too, unless it’s on the employee’s way home. Then everybody wins. However, it doesn’t look like this time is technically considered work time so you don’t have to reimburse if you don’t want to.
I did a little research and here’s what I found out:
First of all the DOL says this:
“normal travel from home to work [whether at a fixed location or at different job sites] is not work time”
Then I found this example on the Cornell University Law School page:
Now, it looks as though you would only have to pay your employee their hourly wage if the employee were sent to work in another city. This would fall under this circumstance making the travel time compensable:
I run a small alarm in Oklahoma. I provide company trucks, company gas cards and insurance for truck as well of coarse. I let the employee drive company trucks home. They will leave their house going to the first set appt of the day or come to office then from their they go to first scheduled job. Then they might have a few other jobs scheduled through the day. Do I have to pay the their full wage during travel as they get for being on job. Or if they travel to site but don’t make it get sick set on side of road for hour and drive home. Or let to go to job but once they drove hour and 10 minutes to get their realized they for some reason took equipment off their truck and left it at home. Which should of never been took off truck. Thanks for your reply
Hi. You do not need to pay your employee for the time it takes them to drive to their first job site and home from their last job site unless it is out of town. Then you will need to pay for travel time. The time employees spend driving from job to job you do need to pay for. However, you can pay a lower “travel time rate” if you choose. Just remember that it must be at least minimum wage.
We are small based alarm company in Oklahoma. We have two office locations. Another question I have one lady volunteering to drive her own Personal Vehicle to go and get the other location in check and operating correctly. Do I have to pay her hourly wage if I’m pay travel at .56 mile. This would b nice to know for future reference.
If your employee is driving from job site to job site, you do need to pay travel time. If it’s from home to the first job site, you do not. If she is driving her own vehicle, then you should pay travel time and mileage, although, you may not have to pay mileage (check with your state). But most employees won’t be very happy if you don’t. Now, if you have offered her a vehicle and she has refused it, you could ask her if she wants to make a deal with you. You might offer to give her slightly less mileage and inform her that she can deduct the rest on her taxes.
I run a marketing room that is unsupervised at location. But we have surveillance that is watched and recorded in our home office that is fully staffed. I also provide dialers that work a campaign of different areas and logs when operater is logged into dialer working or in stand by or on their 2-hour breaks or restroom breaks, lunches & etc. Or if they just set their in idle time taking these breaks until their caught visually during the day on camera. But the dialer always has the log of who’s calling and how many calls is made and how much time is just setting their in idle and refusing to work and pretend to be or just leave. Now I allow 2.5 hours a week for call backs. This allows operator to get off dialer to handle their possible sales. I pay these marketers hourly and their bumps up as they make sales. So do I have to pay them for not being on dialer as they should be. Now the 2.5 hours I’ve alotted I understand I will pay them for but the other hours of not being on dialer. It’s not once a week it’s every week.
I want to reimburse my employees for auto use, but I want them to use company gas cards for the fuel, just reimbursing them a fair per mile rate for the maintenance, insurance and depreciation. How could I estimate a fair rate?.
Hello. I wrote a post on this issue. If this doesn’t help, let me know and we can work together on a solution. http://blog.timesheets.com/2014/11/19/paying-employees-more-or-less-than-the-standard-mileage-rate/
We do get mileage reimbursement from our employer. However, sometimes I have to drive long distances and I am not allowed to begin tracking my mileage until I have driven 30 miles. My actual office is only 7 miles from my home, but most of the time I leave from my home to the job. So on long drive days, I have to lose 60 miles of mileage reimbursement. Is this legal? I’m in California
I work for a cleaning co and drive from job to job putting on 295 miles per week and 8 hours of drive time per week using my own car- just wondering how much on average would be paid per week for this? —–$ amount for drive time and $ amount for miles, wear and tear and standard maintenance up keep on my car. ( oil changes, tire rotation etc…)
Hi Sherry,
The current mileage rate is 57.5 cents per mile. Multiply that by your 295 miles per week and you get $167.90. If your employer chose to reimburse at the federal mileage rate, that would be your check. Employers can reimburse whatever they want. As far as drive time, that really depends. If you are driving for work, say between jobs, you need to be paid at least minimum wage for it. If you are driving to and from work, no matter how far that might be, you don’t need to be paid for it at all.
Reblogged this on Dem Bones.
Thank you!
Question: I understand that employers do not have to pay mileage however can they arbitrarily change your home office to a satellite office for purposes of not paying you the mileage that would be in excess if your office was changed from your primary location originally?
Hi Tess. I am not sure I understand your question. You’re no longer working at your home office but instead at a satellite office that you have to drive to before you start your day? And this office is closer to the sites you must drive to for work? I do not see any reason why a company could not have a satellite office that is closer to their own job sites but if you are unsure about the legality of this change, I would suggest you speak to a employment lawyer.
I have a question I was wondering if someone could answer. I’m in the service industry and for years I’ve had one account about 40 miles away, which was my commute. I’ve always been reimbursed for business miles though, including mileage I occur for off shift service calls. Last fall I was given another account 100 miles away in a city across state lines when a co-worker fell ill. I have always been reimbursed my mileage 100% when traveling to that location. This spring I lost my closest account but still received 100% reimbursement going to the far account because of the distance. I was informed starting June 1st that no business miles will be reimbursed at all, but I just discovered that another co-worker living in one state , who was just given control of an account in an adjoining state, is getting his mileage reimbursed. It too is his only account. Is legal for my employer to change the rules depending on the employee?
Hi Steve, that is a great question. Benefits packages (and mileage reimbursement is a benefit) can vary from employee to employee but to be sure, I think you should discuss it with an employment lawyer.
I’m a pharmacy technician that works out of a rehabilitation center in Florida. I oftentimes have to go pick up medications from pharmacies like cvs or Walgreens. Sometimes even from other facilities over 2 hours away. Recently my supervisor said that if I wanted to claim the mileage I have to clock out when I make the trips. Is this legal? Aren’t I suppose to get paid for doing anything work related if I’m not on a salary?
You definitely should be paid while driving for work, yes. The only time you shouldn’t be paid for driving is to and from work. https://blog.timesheets.com/2014/05/travel-time-should-be-paid-work-time/
In most states, employers do not have to reimburse for mileage if they don’t want to but, obviously, making an employee drive their own car and not giving them reimbursement is not very desirable to the employee. It’s not very good practice, generally.
I use my own car for work i am required to inspect 8 different stores one of the is 22 miles away they want me to start my mileage when i get to my 1st stop i think should get reimbursed for that mileage because they are asking my to go there am i wrong or right
Nancy,
It’s pretty reasonable for a company to start tracking mileage after you get to your first destination and stop tracking it before you leave your last, as long as it’s within a reasonable distance, i.e. in the same city. However, if you drive to a workplace and start and end your day there, all of the mileage should be counted.
Nancy,
I own 2 companies and have a office in my home. The 2 companies are quite different. One is a vending company that I am 50/50 owner of. The company makes the car and insurance payments. I pay for gas. how should I use the miles? The other company is a insurance company where I visit car dealerships. I am sole owner of that company. Can I pay myself mileage, the 57 cents per mile or whatever it is in 2015? Thanks.
i have sales reps that are required to attend sales meetings once a year at a central location. typically they begin getting paid mileage after they leave their first store. Would the sales meeting be considered their first stop and therefore not be required to pay mileage? is there a certain number of miles that an employee must exceed before mileage must be paid or it is considered outside commuting? This is concerning employees in CA
thanks
Hi Trecia,
Employees who must leave their city for work should get paid for that time. If employees are leaving from the office or the store to the place of training, they also need to be paid for that time.
Technically, you never have to reimburse for mileage. It’s always optional.
My employer requires me to drive out for a meet and greet of new clients. It is sometimes almost a 30min drive. I meet the people for about 10 minutes and then I go home. It is usually on my day off or after I finish with another client. Do they have to pay for the meet and greet? I live in Tennessee
It sounds to me like that is time on the clock which you would need to be paid for.
I asked them if it was covered and they said no. What am I suppose to do? I feel stuck
The Federal government does not require that your employer reimburses for mileage (State laws may vary on this) but if you are working, they do have to pay you your hourly wage. If they do not pay you for time worked, you could get a lawyer (which might mean the end of your job and some compensation check) or hand your employer the evidence they need to understand the problem. Often times, employers just don’t know all the rules. There is a lot to know! These links might help you get started.
http://www.dol.gov/whd/regs/compliance/whdfs22.htm
https://blog.timesheets.com/2011/06/time-on-the-clock-waiting-time-on-call-time-travel-time/
https://blog.timesheets.com/2013/07/employees-working-after-hours-is-it-compensable/
I work primarily from home; however, I am paid my hourly wage when I have to drive for business. Can I still deduct mileage even though I am paid hourly during drive times?
Yes, you can. Travel time is an hourly wage that is part of your work. Mileage is totally separate from that.
My employer does not pay mileage; however, we paid for time when we are driving. We primarily work from home, so this means that we are paid any time we have to drive to the office, a meeting, etc. Can I still deduct mileage on my taxes even though I am driving on the clock?
Susie,
Travel time is paid work time. Generally, time driving to the office from your home is not paid, but if your employer chooses to pay you for this time, that’s fine. As long as it is paid “time” and not some set amount that could look like mileage reimbursement, you’re aren’t getting any mileage reimbursement and you are free to claim it.
Hi , I will have a 4 part-time employee in my residential cleaning business. I don’t have an office, it’s small operation from my home. Their total hours per week is no more than 20 hours. They drive to clients home from their home. Do I need to pay them mileage or gas and if so whats the best way for them to track their mileage. Appreciate any feedback.
Thanks. Thari
Hi Tharifah,
According to the federal rules, no, you don’t. But you should check with your state’s laws. By the sound of it, though, you probably would need to pay them for travel time between homes. I hope this helps!
Hello – can you clarify what miles should be reported for reimbursement. Our company does reimburse for mileage – here are our scenarios:
1. If I come to work and must go to another location (site) – do I get reimbursement for the miles from my work to the other location and back to work or just the miles to the location? Does returning to the office or going home from the other location play a part in the reporting miles?
2. If I have an employee who’s normal work schedule is at one location and she is asked to cover at another, are the miles from her home location to the coverage location and back counted?
Hi Christy,
You can think of it this way: If the time should be paid travel time, then the mileage should also be reimbursed. Travel from home to work, or home to some alternate work site that is in-town is not time that an employee needs to be paid and so it’s also not mileage that a company needs to reimburse. But travel from work to a work site and back to work is all working time for which an employee needs to be paid and should be reimbursed. If an employee travels from work to a job site (in-town) and then home, he would only need to be paid and reimbursed for the first leg of the trip.
Can an employer make an employee pay for gas in a company owned vehicle
My company acquired another company a few months back and now I am up there about once a week updating IT infrastructure. I am compensated for mileage at the full IRS rate but since my normal commute is 20-25 minutes and this commute is 1.5 hours each way should I get my hourly rate for that roughly hour difference?
Hi Marc,
From what you told me, I would guess not. If you are starting out at your house, then the commute should not be paid time. Take a look at the quote on this article. It should answer your question. https://blog.timesheets.com/2014/05/travel-time-should-be-paid-work-time/
I started doing home health care nursing where I go to patients houses. Most the time I only went to one house in a day. I left from my house and returned after only going to one patients house. Does this mean I can not claim the mileage on my taxes?
Wow in lousiana we got 24 mil we had to clock in for cleaning job and out about two hours than 24 Cents a mile to next job. No help with maintance. On car than when i was to put two other people in my car with all cleaning supplies pt crusier covitble. I didnt know girls well but if i got in wreck im responsible. Statefarm advised me my car was used for luxury not business. Thwn fired….
I get paid 11.00 per hour drive time
My hourly pay is $50 per hour
Does my drive time get taxed with my net pay? Or should it be done separate?
example:
I worked 12 hrs @ $50. per hour =600
i had 1 hrs drive time @ 11. = 11.00
Total 611. Is this total taxed? Or only the 600 is taxed?
Hi, im actually a carer working with my own car, my company pay me 20 p per mile how much i can claim from the goverment ? Thanks
I work for a company that does not pay me for my 200 miles a week driving….can ido a form at tax time even if i claim the standard deduction
Finding out your employers reimbursement rate is a very good indicator of the employers ethics and work environment. If an employer does not reimburse near or at the IRS guidelines, then you probably work for a bad employer.
For the past 40 years, most of my employers paid at or within 10% of the IRS rate. My current employer pays 25 cents and everything else about that employer is reflected in their work quality. No paper in the restrooms, dirty restrooms, shaving 15 minutes here and there off employees hours, cheating employees of overtime pay, etc.
If your employer is a low life, look for a better job as soon as the opportunity arises.
This App looks perfect for what I need it for
I work for a large company and do facilty repairs in 10 of there locations. They range from 25 to 100 miles round trips. I go to a different location everyday. They were paying us the $.54 per mile but just changed what they were paying by deducting 40 miles a day. This amount hardly covers fuel cost now. Its 20 miles to and 20 back to home they are deducting. Does the irs not reinburst for the first 20 to and from and work site?? Thanks!!
I work for a company that puts any time worked over 40 hours on a “per diem” check. For instance, if you were paid 10.00 an hour and worked 50 hours per week, you would be paid 400.00 regular pay and then 100.00 per diem, and that 100.00 is tax free. Does this sound legal ? And would I be held responsible for it if it’s not?
The rules are the rules with regard to overtime for hourly workers. Anything else is likely not compliant with the DOL. Generally, it is the employer that gets in trouble for these things, as they are the ones that are expected to know the rules.
I want to know that my boss is getting reimbursement of all conveyance expenses which bear by him during journey from home to office and back so it is taxable or not.
I live in Raleigh, NC and went to an interview in Charlotte, NC and the company said they would reimburse me for travel. Are they required to or is this only if you are employed by that company?
I am not sure what the laws are in NC regarding mileage reimbursement but federal laws don’t require that employers reimburse their employees for mileage. Most states don’t require it either so it may just be that your employer chooses to reimburse. Check with your state’s laws to be sure.
I work as a therapist for a Mobil program in Westchester county NY. I live in the Bronx NY. My normal commute to and from the company site is 14.5 miles. My company does mileage reimbursement at the IRS rate of .54c. which I submit monthly.
Many times my commute will start from my home to a clients home I only charge for all milage from my first visit and in between to the office. I only track from the clients home to the office or any other location in between. If I end my day at a clients I only put the miles from office to last clients home. ( NOT FROM CLIENT HOME TO MY HOME)
-I am now seeing clients in BX, NY. ( 2 Which are close to my home address as a special favor to the company as I’m close) Most days I leave the office and travel to the clients home and then the clients home to my home. I have just been told that I can no longer be compensated for any mileage to ( clients home) BX, NY as that is my normal mileage 14.5 or from client home in BX to office if it equals 14.5 miles. If it is more than 14.5 I have to deduct the 14.5 miles it would take to and from my home to my company location and only be reimbursed the difference. Up until last month I was reimbursed for all my miles.
I currently have 3 clients that I would not be reimbursed for in that case. As their miles are 14.6 14.8.
-I would like to know how do I find the state mile reimbursement law for this.
-Can I claim these non reimbursable miles on my taxes.
Hi Kim,
Any miles from home to work or work to home cannot be claimed on your taxes. Any miles beyond that which are not being reimbursed by your employer can be claimed.
My employer no longer compensates mileage for me when I travel to our main office to help cover when I’m based out of another office. They did provide mileage for an extended period due to being short staffed but no longer now. I am allowed drive time from my base to the main office which involves me clocking in at my office then traveling to the other and reverse at the end of the day. When other employees travel from the main office to mine they are given drive time and mileage. My boss said they get compensation because they transport equipment/office documents when I know they don’t all the time. Should I still receive mileage competition since I am traveling away from my base office?
My employer charges our clients .65 a mile and pays us .55 per mile. Is this normal?
I work for a private run company that requires the use of your personal vehicle. They are only paying 35 cents a mile. Is that legal?
It depends on which state you live in but on the federal level it is legal. You can claim on your taxes whatever your employer does not reimburse.
I am working for a cleaning company and they pay us only $4 per house no matter how far it is sometimes its up to 20-30 miles one way. Personally this is extremely low since I am using my own car. How do I claim the milage on my taxes??! I have no clue!
Hi Heather. Here’s what you should do: Keep a mileage log for all the miles you drive between houses. So, either write down the starting and ending mileage between houses or get an app that you can turn on while driving. Then, at the end of each pay period, add up the miles driven. Also, add up the number of dollars compensated for driving. Multiply your miles driven by the current IRS rate, which is 54 cents right now. If that number is less than the dollars you’ve been compensated, then the difference is what you can claim on your taxes.
https://blog.timesheets.com/2016/03/what-you-need-on-your-mileage-log/
I recently started working for a government and grant funded program. I have worked for similar programs/organizations for the last ten plus years. Previously if I had traveled from home to a client’s home or a site for work purposes, I would be paid mileage for that travel. If the distance from my home was less than it would have been from the office, I would get the lesser mileage. If the distance from the office was less than from home, I would get the lesser amount. Now, at this new job, I am required to drive all over the Denver Metro area for my job and I can work from home, which is 37 miles from the office. However many of the sites I visit are closer to my home than they are to the office. No matter what I do they deduct my commute and I only get reimbursed if my total miles is more than my total round trip commute. Last month I drove several hundreds of miles and received a mileage reimbursement for only $4.75. Sometimes I even drive to a site from the office, which is located on my way home and don’t get any reimbursement because it’s on my way home. Additionally we were required to go to a retreat in Colorado Springs that for me was 96 miles one way. From the office it would have been 71 miles. A co worker who lives close to the office got reimbursed nearly $80 for the trip and I got $30. All of this seems off to me and is very different from how any other previous employer had calculated mileage reimbursement. Some advice would be very helpful.
Hi Shelby. Just to be clear, you’re saying that your previous employer paid you for mileage as though you were driving from the office? And that your current employer only gives you mileage reimbursement if your mileage from home exceeds the commute to the office from your home?
Forgive me if I’m not following, but as I understand your situation, this doesn’t sound off to me. An employer doesn’t need to reimburse the commute, which in your case is quite far. If you drove to and from the office every day, you would drive 740 miles per week. That is a lot of commuting miles that your employer doesn’t see themselves as responsible for.
It also sounds like your previous employer was quite generous and that you probably did get reimbursed for a little of your commute occasionally.
My employer charges clients the full 0.54 cents a mile for me to work a case using my personal vehicle. They only pay me 0.38 a mile in return. It seems wrong that they should be able to profit off miles I incur on my vehicle. I pay all expenses including but not limited to; gas, insurance, car payments, all repairs which are frequent at over 40,000 work related miles a year. It seems unethitical but is it illegal? If it is not why isn’t it?
Hi Jeff. It is common and legal for companies to bill their clients more than what they pay for things. They might sell a client a product and mark it up considerably more than what they paid for it themselves. If may not seem fair to you but it falls within the realm of normal. If you itemize your deductions, you can claim the excess that your employer doesn’t reimburse.
We get paid hourly. Some employees drive kids back and forth to school. My question is, Should milage reimbursement be combined with regular pay and taxed? We’re in NC.
Hi Sandra,
Employees need to be paid for the time they’re working. Driving for work purposes is considered work. Mileage reimbursement is separate from that. According to the FLSA it is up to the employer if they want to pay it. It is mandatory in some states.
I am trying to implement a travel policy for my company. For most employees, business use of their personal auto will be reimbursed at the prevailing IRS reimbursement rate. I have some employees that get a car allowance but are not separately reimbursed for gas, maintenance, or any other related expense. I don’t feel it’s right to reimburse them the same as others since they are essentially already getting paid for the wear and tear on their car. Can you offer any guidance on what reimbursement rate I should use for this situation?
Hi JM. I would love to help if I can get a little more information. What is the car allowance that you offer for some employees and how does it differ from the standard IRS rate?
I own a cleaning company with no office. My employees do not get paid to go to their first job nor do they get paid after their last one. However they do get paid travel time from one job to the next. They feel that this is not enough. If I pay them travel time, am I obligated to pay them mileage as well. $4.50 for a half an hour of driving in town I feel is far. If the mileage is 20 miles. Even the worse running cars get 20 mpg and the average cost of $2.15 per gallon they still make out. Am I wrong with this logic.
Hi Rick. For hourly employees, travel time is working time, so your employees need to be paid at least your state/city’s minimum wage while driving. You might want to consider also paying for mileage. We wrote an article on this very topic. You can read more about it here: https://blog.timesheets.com/2016/05/pay-for-travel-time-reimburse-mileage/
I pay them $9 per hour starting out. That is .50 over the national average because they do use their own vehicle.
My thought is this. In town. It may take them 30 minutes to travel in between jobs but usually is only 20 miles. They are being paid $4.50 for that travel time which is equal to two gallons of gas. Even the worse vehicles, ( not trucks) average 22 miles per gallon. So in essence they are making money.
I work for family in the construction industry in Ohio. I own my own work van and all my own tools. We are required to use our personal cell phones for clocking in, Turing in receipts, making daily logs and updating work orders. Am I supppose to receive compensation for that?
My next question pertains to use of my personal van and tools being used to pick up materials, drive to and in between job sites, and supply guys with proper work tools for the day. I get reimbursed for my insurance and payment each month but the expense of gas and maintenance is costing me about 20-30% of my monthly gross pay. Should I be receiving more reimbursement or is it a take it or lose it situation?
Thanks.
My company gives me a car allowance. I’m a service engineer and travel to various customer sites. On top of the allowance, I get 1/2 Fed mileage rate for every mile driven. Allowance is paid on the time sheet and is taxable income. Mileage is paid as an expense. Would I be able to take any tax deduction on mileage?
Also, is the mileage from last site to my house considered business or personal?
Hi Tony,
The mileage from the last site to your house is considered a commute, which is personal. Your question about the mileage is a little complicated. Is the allowance paid separate from your paycheck or is it lumped together? If the allowance is on your W-2, I am guessing that it’s just wages and is more of a benefit than a mileage reimbursement. I am not certain about this but a tax advisor could help you with that.
I meant to say “allowance is paid with the paycheck. It is a separate item but taxed as regular income”.
If I drive my own truck with all the tools of work as a painter…van .. v8. Chevy 2500 .. full Tools company… And I drive every single day to Oakland who should pay for the gas nooline.. mostly I spend 35 dollars every day… And drive is 2 hours traffic’… I only get 2hours driving… I spent more in gasoline… What should I do . I drive from house to the place to work.. and place to home…
The commute is the responsibility of the employee.
My employer reimburses employees at 0.43 / mile but then issues the reimbursement in our paycheck and we get taxed on it. Shouldn’t this be a separate check as we are already taxed at the pump and for the services we’ve had done to the car and now we are being texted in our payroll check? Please advise??? Thank you!
In general, reimbursements don’t need to be taxed.
My husband is making trips for workmans comp. There are fellow employees making these trips also for the same thing. The other employees are getting a high mileage rate than he is. Is this legal and if not what steps does he need to take?
You should talk to an employment lawyer about this. It might violate some equal opportunity laws but that is not my specialty so I don’t know.
If you’re also hauling a fuel tank for fuel use in Equip the employee is operating as well as their own vehicle should they get paid more?
My employer reimburses mileage at $.13/mile. It comes on a seperate check, untaxed, with the amount of miles being reimbursed as well as the dollar amount printed on the check stub, every payday. Based on what I have read, this means that I can deduct the difference between what they reimburse and the standard mileage rate of $.54 which would amount to $.41/mile as a deduction. My two questions are, am I understanding that part correctly, and do I still need a mileage log or would saving all the reimbursement check stubs suffice since they include the amount of miles being reimbursed as well as the dollar amount? I keep a mileage log which gets submitted to the company, and I am wondering if I should photocopy it before turning it in, or if simply saving all the reimbursement stubs would cover my deduction claim in the event of an audit.
Hi Brian, not being a tax expert, I really can’t say what you’d need in the event of an audit, but it seems like the more documents the better! If you are keeping a mileage log, I’d keep them on hand.
What does the amount reimbursed per mile include? Is it also for wear and tear?
Hi. The information in this article should help. https://blog.timesheets.com/2017/02/driving-costs-the-irs-mileage-rate-covers/
Our company reimburses for mileage incurred for business purposes. If an employee just submitted a report with mileage from last year, do we need to reimburse at the 2016 rate, or are we supposed to adjust to 2017 rate?
Hi Gabriel,
If those expenses are for the 2016 tax year, then using the 2016 rate would be the least complicated.
hello,
I travel for work a few times a month and use my personal car. My employer will reimburse the IRS rate but will not reimburse the entire mileage. Here is an example: drive from work to business partner location & back = 400 miles. Miles from home to work is 100 miles. Travel from home to business partner location & back = 300. My employer is reimbursing only for 300- 100 = 200 Vs actual miles of 300. Can I claim the balance 100 miles at the IRS rate on my personal income tax if I tracked my milage. Thanks.
Question: We are in CA. We don’t reimburse for mileage to and from work. However, we do have managers that are out in the field. When we require them to stop by the office to make a drop we pay them from the location to the office. Do you know if we then have to pay them from the office to their home since we altered their route to their home?
Generally, the last job site to the employee’s home is not reimbursed. I would think this would fall under that scenario.
What is considered the value of a vehicle? My employer only gives me a gas card nothing else I put on appx 30000 miles a year and my car is getting in need of replacement after 5 years.
To determine how much your employer is not reimbursing you, multiply your miles driven per year by the current mileage rate. Subtract from that the amount of the gas card per year. You can use that number to figure out whether your employer is in violation of minimum wage laws or just use it to know what to claim on your taxes.
Hello I’m an employee that travels for work. The company pays for fuel and tolls but no truck wear and tear. How would I go about. Filing my taxes to claim this.
Hi Jason. Multiply your mileage for the year by the current mileage rate. Subtract from that the fuel allowance. This will give you the amount that wasn’t reimbursed, which you can claim.
If I pay for gas for my employee that uses his personal vehicle how much should I pay for him for mileage ?
That would totally depend on how much the gas reimbursement is and how much the employee drives. Technically, gas costs are covered in mileage reimbursement so you should only need to make one reimbursement if you use the IRS rate. https://blog.timesheets.com/2014/03/gas-costs-are-covered-in-mileage-reimbursement/
I help my mother’s company twice a week with purchasing merchandise using my own car. I am not a technically an employee of her company, and I have a regular W2 job elsewhere. I would like to get a tax deduction for my help if possible. How would you go about doing this?
What should we pay employee for mileage with his pickup truck with us paying for fuel
This article should help you figure that out: https://blog.timesheets.com/2014/03/gas-costs-are-covered-in-mileage-reimbursement/
I get 38 cents a mile , I drove around in my job run errands , and was wondering is it possible for me to put the difference on tax season
I am an employer but wish to pay less than the irs rate since most of employees drive old cars costing less than current average car price. Is the irs mileage rate based on an average cost of a new vehicle that year (new models)?
Or does it include older vehicles.
Hi Frank, the information in the blog post might help. https://blog.timesheets.com/2017/02/driving-costs-the-irs-mileage-rate-covers/
I work for a small company in California and we’re trying to figure out how much we should reimburse our truck drivers for the use of their own trucks (these vehicles are heavy trucks as classified by the US GVWR and are used for transporting building materials). Is the IRS standard rate different for these types of trucks? I’ve been looking all over the internet and can’t find an answer to this question so any help would be appreciate it! Thanks so much!
Lucia,
I don’t know if there is a different rate for truck drivers. Maybe you can ask around within your industry. I do know that the truck drivers themselves need to claim their actual expenses and not claim the standard mileage deduction on their taxes.
My employer pays me .52 cents per mile. my question is .. in the payment for the millage, includes maintenance costs as for example .. oil changes, tire rotation, buy new tires etc etc ??
Mileage includes all of those things, yes.
I work for an oilfield company and they pay for my gas that I use to go to my job location. Should they be paying for my mileage also? I drive around 900 Mile’s a month
I’m in California and the non profit I work for only reimburses @ .34 cents a mile. Which I am fine with. What I am not fine with is that they add my monthly reimbursement money in with my regular paycheck… it puts me in a higher tax bracket and I don’t see it. Example… I am getting reimbursed 300 they add it in to my paycheck of 1,200 (net pay) and it bumps me up to the high 1,300’s. Is this legal? I was under the impression that you had to pay the reimbursement on a separate check.
The federal government allows you to write off up to a certain amount of reimbursed mileage on a per mile basis. You’re well below the threshold. If the company includes it as income, I think you can still do the deduction at tax time. I’d speak with a CPA to confirm and then go to the company with their guidance if it requires any changes. It should definitely not affect your tax bracket though.
I am an hourly employee paid to lead 1-day trainings. I have no office that I report to as I live and work in CA and the corporate office is based in another state. Most of my trainings are about 150 miles from my house. Is the company required to reimburse my mileage? If so, would the reimbursement be round trip or one way?
California has it’s own set of reimbursement rules, which you can read more about in this Mileage Reimbursement in CA blog post. CA requires employers to reimburse for all expenses incurred.
Our company does not reimburse the first 15 minutes/15 miles for mileage reimbursement. I can’t find where this is right or wrong. Do you have any way of knowing or some document that explains it better?
If you want better documentation and understanding, I would consider checking the FLSA and the IRS website. The federal government actually doesn’t require employers to reimburse mileage, that’s up to the employer and potentially your state (if they have reimbursement laws). The federal reimbursement mileage rate is just a guideline for employers, and they can choose to follow that or not. Check with your local labor board to see if you have any applicable mileage reimbursement laws.
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How Much to Reimburse for Employee Mileage