Mileage Reimbursment

jean9 · July 2008

Do you use the IRS rate to reimburse your employees? If not, what do you use and what do you base it on? Thanks.

ray a · July 2008

My employer always uses the IRS rates, we adjust ours whenever the IRS makes changes.

dixied · July 2008

We also use the IRS rate and adjust as they do.

FunHRBanker · July 2008

Our CFO has done some sort of calculation and we only pay $.35/mile. Employees can claim the difference between that and the IRS rate on their taxes. We also have a company vehicle that employees can use.

We have repeatedly asked for an increase, but he strongly believes that people will take their own car to "make money" on the mileage rather than taking the company vehicle.

lnelson · July 2008

We pay .38 per mile, the theory is the same as FunBanker. Our CFO considered all the expenses and said even if gas is 4.50 a gallon this reimbursement is sufficient to cover all expenses.

NaeNae55 · July 2008

We have had some concerns about employees using the mileage rate to make money. However, we feel the best way to counteract that is to carefully monitor who goes where and when.

The fact is that most employees do not get it - that they can claim the rest on their taxes. Some will file short form and be unable to make the claim even if they understand that they can. We don't feel, "Tough, that's their problem," is the best approach to take with our employees. We don't want them to think we are uncaring of their position, especially when they went out in the first place on company business. When employees find out that other companies will reimburse the full IRS amount, they often feel their own company cheated them. Something else we don't want our employees to feel.

The IRS rate is based upon a number of factors, including the actual cost of an average car, insurance, maintenance, and of course, gas. If your employee drives an economy car, they are probably making money. If they drive a luxury car, they are probably losing money.

We therefore feel the IRS rate is a fair, and easy, way to reimburse our employees. It is just, and a standard that removes any bad feelings by those who have luxury cars (and let's face it, those are the ones who often have management influence.)

Just my 2 cents.

Good luck!

Nae

joannie · July 2008

Our policy states the IRS rate effective as of January 1 each year. Simplifies things, having just one rate for the entire year.

lrobb · July 2008

we raised ours to .55

jean9 · July 2008

Thank you all for your responses. We are a relatively small company and our sales team is all over the country and they all do a lot of driving. We are trying to come up with a system for deterimining a rate that is fair to both the employee and to the company.

Thanks again,
Jean

Mileage Reimbursment

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