Question:
Is an employer required to reimburse employees who drive their cars for work? Not to work but for work use? If so, how much is it per mile?
Answer:
Great question! As of 2024, only California, Illinois, and Massachusetts require private employers to reimburse employees for mileage. The best practice is to reimburse an employee at the IRS rate when they use a personal vehicle for business purposes. This helps employers prove they never required the employee to incur any expense that would drop them below minimum wage. The best practice also helps with morale and competition for workers.
The current IRS ragte is .67 per mile. https://www.irs.gov/tax-professionals/standard-mileage-rates
Employers are not required to follow the IRS rates, but it is the best practice. Paying a rate equal to or less than the IRS standard (67 cents per mile for 2024) keeps the reimbursement tax-free for employees, as long as the company maintains accurate records of business trips and mileage.
I hope this helps.
Note: This blog post is for informational purposes only and should not be construed as legal advice. Always consult with a legal professional for advice specific to your situation.
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