Mileage reimbursement guide for 2022

Mileage reimbursement guide for 2022

Having to pay for fuel can be a major money drain for both small and large businesses, especially with the raging gas prices. Thankfully, with mileage reimbursement, you can get back some of that money – but what’s the most efficient way to do so?

If you’re eligible for mileage reimbursement, or you think you might be, keep reading to find out how to get the most out of your miles.

Who can benefit from mileage reimbursement?

If you don’t have your own fleet of vehicles to use for business purposes, your employees may have to use their own vehicles on your company’s behalf. Whether they’re delivering supplies or traveling from client to client, you might have to reimburse them for the fuel costs and vehicle depreciation costs.

In the United States, employers will have to abide by both federal and state laws that dictate the minimum reimbursement rate. In order to follow the laws and have your employees feel they are treated fairly, you’ll have to keep a detailed mileage log.

How does mileage reimbursement work in the U.S.?

There are a couple of ways to go about mileage reimbursement. The first one is car allowance – a flat-rate, periodic reimbursement paid out to all employees that use their own vehicles for company purposes. This solution, however, isn’t very accurate,

Employers can also introduce cost-per-mile reimbursement, using the standard mileage rate ($0.585 in 2022 for most businesses). Instead of fixed costs, employers pay variable costs, based on how much their employees have actually driven.

The third approach is FAVR, or Fixed and Variable Rate program. It accounts for expenses like insurance, taxes, and maintenance, but also includes variable expenses including fuel, oil, and new tires.

Which mileage tracking method works the best?

The cost-per-mile and FAVR approaches need a mileage log to work. With MileageWise is a mileage log app with which you can save up to $12,000 on average per year per car in tax deductions, thanks to 3+1 automatic mileage tracking modes. The app creates an IRS-approved mileage log, based on your trips, and comes with a 14-day free trial with unlimited trips.

Don’t let inefficiencies eat your profits – go with a trusted mileage log solution like MileageWise!

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