Standard Reimbursement for Work-Related Mileage

by W D Adkins ; Updated July 27, 2017

Many jobs require a lot of driving. If you must use your own vehicle for work-related travel, the costs can add up quickly. Fortunately, many employers reimburse employees for the expense of work-related mileage. Usually, the amount of the reimbursement is tied to the standard mileage rates published each year by the Internal Revenue Service.

Work-Related Mileage

Employers can only pay standard reimbursement for travel that is specifically tied to your job duties. For example, driving to a meeting with a client qualifies as work-related or business mileage. However, the miles you drive commuting from your home to your work site are not considered business mileage. Be careful not to mix personal and work-related driving miles. For example, assume you are running a business-related errand and you stop to pick some items up from the grocery. From that point on, the rest of your current trip does not qualify as work-related mileage.

Standard Rate

When the term "standard reimbursement" is used, it usually refers to the standard business mileage rate set by the IRS. Each year, the IRS determines a rate that defines how much money per mile an employer can pay as a tax-exempt business expense or that a taxpayer may deduct for business expenses on her tax return. The standard rate changes each year as the cost of driving is variable, especially when it comes to fuel costs. For example, in 2011, the IRS set a standard business mileage rate of 51 cents per mile.

Tracking

To receive any reimbursement or claim any tax deduction for work-related mileage, you must document your travels. Record the odometer reading of your vehicle the first day each year you use it for work-related driving. Record the reading again the last day of the year the vehicle is used. For each work-related trip, write down the date, starting and ending odometer readings and the purpose of the trip. Note where you drove. It’s best to use a logbook you keep in your car. Most office supply stores carry mileage log books.

Tax Issues

All money you receive as work-related mileage reimbursement is tax-exempt up to the standard rate set by the IRS. However, not all employers pay the standard rate. For example, a business might pay only 30 cents per mile even when the standard rate is 51 cents. You can take the unreimbursed portion as a tax deduction. In this example, it means you can deduct 21 cents per mile on your tax return.

About the Author

Based in Atlanta, Georgia, W D Adkins has been writing professionally since 2008. He writes about business, personal finance and careers. Adkins holds master's degrees in history and sociology from Georgia State University. He became a member of the Society of Professional Journalists in 2009.