Mileage Reimbursement for Employees

Learn more about mileage reimbursement for employees. Includes FAQs and a free employee mileage reimbursement form for download.

5 min read • Last updated on November 20th, 2018

Many companies use mileage reimbursement programs to repay employees for driving their own vehicle for business purposes. In the United States, most employees are reimbursed on a per-mile basis at a rate set by the IRS.

Below you will find information on mileage reimbursement for employees, a free downloadable employee mileage reimbursement form, and answers to common questions.

Employee Mileage Reimbursement Form:

Download a free sample employee mileage reimbursement form in Word format.

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Sample Employee Mileage Reimbursement Template:

Download our free mileage reimbursement for employees template in PDF format.

Download Template Instant download. No email required.

IRS Mileage Reimbursement Rules for Employees:

According to the IRS employee mileage reimbursement policy, a company's employee mileage reimbursement program must include the following three rules:

  • An employee must have paid or incurred expenses that are deductible while performing services for your business.
  • An employee must provide an adequate account to you as the employer, for these expenses within a reasonable time period.
  • As the employer, you must return any excess reimbursement or allowance within a reasonable time period.

If your mileage reimbursement policy does not meet all three requirements, your plan will be considered non-accountable, and your employee's reimbursed monies should then be included on his/her Form W-2. In this case, you must report the payments as income.

Employee Mileage Reimbursement FAQs:

Does every company need to have an employee mileage reimbursement policy?

This depends on where you're from. In some states, employers are required by law to reimburse employees for using their own car or a rental vehicle for business purposes. As a rule of thumb, many companies do have an employee mileage reimbursement policy to keep their employees happy.

Most companies use the IRS rate for business travel as it's considered fair, but some companies have adopted a fixed-rate program where employees are charged a flat rate each month.

What is the current IRS rate for mileage reimbursement?

The employee mileage reimbursement rate for 2018 is 54.5 cents per mile for regular business driving. The rate for non-profit employee mileage reimbursement is the same.

How do I calculate mileage reimbursement for employees?

To work out how much mileage reimbursement should be for an employee, multiply the number of miles your employee has claimed by the IRS rate of $0.545.

Many companies use payroll software to help them reimburse employees for miles.