How Much Should an Employee Get Paid to Travel?

The 2010 IRS standard mileage rate for business travel is 50 cents.

IRS Rate Is 50 Cents

The Internal Revenue Service annually issues an optional standard mileage rate to advise profit and nonprofit businesses on deductible costs for business, charitable, medical or moving-related travel. The rate for 2010 is 50 cents per mile for business travel. This rate is adjusted annually based on actual costs to travel, which are most influenced by gas prices.

Actual Rates Vary by Travel Type and Organization

Rates for medical or moving purposes are much lower, at 16.5 cents per mile, with a 14-cent rate for charitable service travel. Actual rates paid by organizations may vary, as the IRS requires only an "accountable" measure for calculating travel expenses. Many state-based organizations and large private companies abide by the IRS's recommendation. Some low-budget, nonprofit and social services entities may have a slightly lower rate (30 to 40 cents is common) for employees who travel for service-based work.

Bottom Line

If travel is going to be a routine part of a job, consider whether your company should pay the IRS's recommended rate. The rate covers fuel and normal wear and tear on your vehicle. Some social services and nonprofit employees have to consider whether a lower travel reimbursement rate is acceptable. You can sometimes deduct non-reimbursed work mileage on your income tax return.

References

• Hobart and William Smith Colleges: Travel Expense Reimbursement Guidelines
• Not-For-Profit Accounting: 2010 IRS Mileage Rates
• Panache and Systems: 2010 IRS Mileage Rate Drops 9% From 2009 Level