What Is Mileage Reimbursement for Travel?

Mileage reimbursement is the amount of money a company pays an employee for business-related driving. The reimbursement is intended to compensate the employee for gas, insurance, and wear and tear on a personal vehicle.

IRS Rate

How much are you paid?

The IRS business rate for mileage reimbursement in 2010 is 50 cents per mile. Some businesses use this figure to calculate the cost of operating company-owned vehicles, and they deduct that cost from taxes. Some companies also use the IRS rate as the reimbursement rate for employees.

Slight Declines

High gas prices can affect mileage reimbursement.

The IRS mileage rate was 55 cents per mile in 2009. It was 58.5 cents per mile in the last half of 2008, a response to high gas prices. The IRS uses the costs of vehicles and gasoline to determine its rate.

Company Policy

Not all businesses reimburse employees at the IRS rate. Some pay less. Employees who work for those companies should ask and accountant whether they can deduct the difference from income taxes.

Other Mileage Reimbursement

There's a specific rate for mileage while moving.

The IRS reimbursement rate for mileage incurred while moving was 16.5 cents in 2010. Mileage incurred while volunteering was 14 cents.

Katrina

There were special mileage reimbursement rates after Hurricane Katrina.

The government also has other established mileage reimbursement rates. In 2005, for example, the IRS established mileage reimbursement rates for Hurricane Katrina-related driving.

References

• Historic Mileage reimbursements