Mileage reimbursement describes the money paid back to an employee to cover the cost of using their vehicle for work-related activities. The reimbursement is usually in the form of a tax inference or a refund. Reimbursement is also defined as cash paid by an organization to cover for a business transaction that has already been made. In simpler terms, it refers to money paid to a customer, an employee, or another party as repayment for an expense they have paid out of their pockets.
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The Following Professions May be Eligible to Receive Mileage Reimbursement:
- Salespeople
- Personal concierge company drivers
- Nannies
- Taxi drivers
- Government employees.
Aspects of Mileage Reimbursement
Getting mileage reimbursement depends on various factors. If you are thinking of requesting mileage compensation, consider the aspects below:
Eligibility
Employees who use their private vehicles for the sake of their company may be eligible for mileage reimbursement, but this does not necessarily mean that all employees are eligible. Independent or private contractors who work for rideshares and delivery businesses are not eligible for mileage reimbursement. On the other hand, employees who receive monthly salaries may be eligible for reimbursement based on their job contracts’ company policies and details.
Whether or not you qualify for mileage compensation entirely depends on the details of your employment. Usually, this agreement is discussed ahead of time, and the employee is aware of how much they will receive per mile when they are hired.
Standard Rates
The IRS usually sets these rates. They serve as a base reimbursement rate for all employers. Although many businesses choose to abide by the standard rates, it is not a legal requirement. Employers may choose to offer a reimbursement that is more or less than the IRS standard rate.Usually, it is up to the employer to decide which costs to cover in reimbursement and which not to cover. However, there are typical costs that are included when reimbursing mileage. These include:
- Transport incurred while transporting customers to a destination
- Travel cost to a temporary job site
- Travel costs to a business convention or conference
- Visits with customers
- Travel to and from the airport, bus station, or train terminal
It is highly recommended that you discuss your job expectations with your employer when discussing mileage reimbursement rates.
Employer Requirements
Generally, employers are not required to offer mileage reimbursement unless failing to do so makes the employee drop below the state’s minimum wage level. Adjusting reimbursement rates per mile is a great way to attract highly qualified and talented employees. This is primarily during seasons when there are low unemployment rates, which makes it difficult for companies to attract the best candidates.Increasing your rates above the federal standard rate can be translated as extra income; therefore, you can easily attract candidates to fill an open role. Since employers cannot always increase salary, they can improve their compensation package with extra benefits such as:
- Mileage reimbursement
- Fuel card
- Car allowance
- Monthly vehicle allowance benefits.
How to Track Mileage Reimbursement
You can keep a record of your mileage by using an expense-tracking program. These programs allow you to set your reimbursement rate then calculate how much the company owes you, based on the mileage keyed in. many employers include reimbursement on the next paycheck.
Follow these Steps to Track Your Mileage Reimbursement:
- Record the date of the trip
- Write down the time of the trip
- Record the odometer reading at the beginning of the trip
- Add the location and destination of the trip
- Add a brief description of the purpose of the trip
- Note the odometer reading at the end of the trip.
How to Calculate Mileage Reimbursement and What Records you Need
As much as it is quite easy to calculate mileage reimbursement, the records needed to prove it is often very challenging. Confirm with your employer what is needed. However, most employers require the following records:
- The date of the drive
- Your mileage
- The place you drove to for business
- The business reason for your trip
Make sure to promptly create your mileage log, as most employers prefer it included in a monthly expense report to avoid late compensation.
What is the Use of a Mileage Reimbursement Form?
A mileage reimbursement form serves the following benefits:
- It allows an organization to refund the traveling expense incurred by its employees.
- It is advantageous in recording the details of a business trip, such as the distance and destination of a given trip
- It helps in tracking down the employees’ traveling expenses and helps minimize nonessential travel.
What is Included in a Mileage Reimbursement Form?
A mileage reimbursement form must contain an employee’s necessary information such as; employee’s name and department, details of their vehicle, and reason for the visit. It should clearly outline the date of traveling, destination, time, and original place of traveling. The form should mention the odometer reading at the start and endpoints of the trip. It should include the agreed-upon rate per mile and total calculations of the miles traveled. It should mention the compensation amount that the company owes the employee, signatures of the employee, department supervisor, or authorized approver. Finally, the document should contain the project’s details to calculate the project’s final traveling expenses.
Tips for Asking Your Employer For Mileage Reimbursement
Consider asking your employer for mileage reimbursement when first negotiating your compensation package, immediately after accepting a new job. You may also ask for mileage compensation if the work expectations have changed and entail frequent traveling with your vehicle.
If you are preparing to discuss Mileage Compensation with your employer, the following tips will be beneficial to you:
Calculate your current or intended mileage ahead of time- many employers don’t usually realize how many miles their employees have put or will put on their vehicles. Therefore, doing your research in advance helps you start the conversation and having specific conversation points.
Calculate how much your mileage translates in cost- after calculating the number of miles you intend to cover for a trip, compare the total to the average fuel cost.
Complete your calculation- add the cost of repair and maintenance of your vehicle to the total figure and provide these figures to your employer to back up your request
Discuss with your employer the available reimbursement rates- at the end of it all, your employer decides to set a reimbursement rate that they feel comfortable with. However, you can look up the standard federal rates ahead of time and start the conversation prepared.
Discuss a record-keeping process- if you make it a habit to schedule a record-keeping process before traveling, it allows you and your employer to track mileage.
Download our Mileage Reimbursement Form Templates
Download our free professional Mileage reimbursement form templates, which are fully functional, practical, and with instructions to help guide you. Our template files are in PDF and docs format and are compatible with all printers. You can personalize the templates to meet the expectations of your job before downloading and printing them.
Conclusion
Employees use Mileage Reimbursement forms to ask for compensation when they travel using their car for business transactions. They also use the forms if they get injured due to an accident while out working. The employee is supposed to fill the miles they have covered and submit the form to the employer for reimbursement. On the other hand, business organizations can use mileage reimbursement forms to track the business travel expenses of employees to minimize unnecessary travels.
