www.everlance.com Open in urlscan Pro
34.251.201.224  Public Scan

Form analysis
1 forms found in the DOM

Name: wf-form-Subscribe — GET

<form method="get" name="wf-form-Subscribe" data-name="Subscribe" style="opacity: 1; transform: translate3d(0px, 0px, 0px) scale3d(1, 1, 1) rotateX(0deg) rotateY(0deg) rotateZ(0deg) skew(0deg, 0deg); transform-style: preserve-3d;"
  data-w-id="163f1df8-c5fd-ab47-eeac-6a423f48cf21" id="wf-form-Subscribe" class="subscribe-form" aria-label="Subscribe">
  <div class="input-wrapper no-margin">
    <div class="input-icon-base dark-bg"><img src="https://assets.website-files.com/6019e7e5c68507850121a341/6019e7e567465225b8cff4d1_paperplane-icon-white.svg" alt=""></div><input type="text" class="input icon-input-bg w-input" maxlength="256"
      name="email-2" data-name="Email 2" placeholder="Enter your email" id="email-2" required="">
  </div><input type="submit" value="Subscribe" data-wait="Please wait..." class="button-18px white margin-left w-button">
</form>

Text Content

Loading...
Solutions
For CompaniesFor Self-EmployedFor Partners
Products
Mileage tracking
Automatic mileage logs

FAVR program
Fixed & Variable Rate reimbursement design & management

Expense tracking
Automatic transaction logs

CPM program
Cents Per Mile reimbursement management

Deduction finder
Tax deduction review

Driver checkup
License, insurance and MVR verification
Pricing
Resources
About usResource hubHelp centerTax calculatorJobsContact us
Login
Sign up for free
Solutions
For CompaniesFor Self-EmployedFor Partners
Products
Mileage tracking
Automatic mileage logs

FAVR program
Fixed & Variable Rate reimbursement design & management

Expense tracking
Automatic transaction logs

CPM program
Cents Per Mile reimbursement management

Deduction finder
Tax deduction review

Driver checkup
License, insurance and MVR verification
Pricing
Resources
About usResource hubHelp centerTax calculatorJobsContact us
Login
Sign up for free

Everlance Business


6 THINGS TO KNOW IF MILEAGE REIMBURSEMENT IS A JOB BENEFIT




Posted on 
Sep 16, 2022
  by
Team Everlance

Are you providing mileage reimbursement to employees as a job benefit?

If so, there’s a lot to consider: from tax laws and IRS-compliance rules, to
reimbursement costs and amounts, different vehicle programs and employee needs,
and more, it’s no small feat to pull off a mileage reimbursement program that
truly benefits everyone. 

But mileage reimbursement doesn’t have to be a chore. We’re here to walk you
through six things to know if you’re offering mileage reimbursement for
employees, so you can make sure your vehicle program works for your company and
your staff. 


1. UNDERSTAND EMPLOYMENT AND TAX LAWS FOR MILEAGE REIMBURSEMENTS 

When it comes to federal laws and requirements for mileage reimbursements,
there’s two main rules to keep in mind: 


ALL COMPANIES ARE REQUIRED TO REIMBURSE EMPLOYEES FOR WORK-RELATED EXPENSES. 

If your employee’s job description includes driving, vehicle and gas costs are
considered a work-related expense. You can reimburse employees for these
expenses via a number of methods, such as: 

 * Providing a company car so that the employee is not paying for
   driving-related expenses out-of-pocket 
 * Providing a flat allowance or reimbursement each month to cover average
   costs 
 * Providing a reimbursement based on the number of miles driven 

However, there is no federal law that requires employers to reimburse for
mileage, so long as the expenses incurred from driving doesn’t cause your
employee to earn less than minimum wage. If your company fails to reimburse
employees for work-related expenses and it causes the employee’s net pay to drop
below the federal minimum wage, your company can end up in hot water. 


MILEAGE REIMBURSEMENT IS TAX-FREE TO BOTH EMPLOYEE AND EMPLOYER—AS LONG AS YOU
KEEP A FEW THINGS IN MIND.

However, this has regulations around it. If you reimburse employees for mileage
beyond the true expenses of work-related driving, this could be considered
compensation and thus subject to taxes. 

As a result, it’s important to carefully determine your reimbursement rates
based on actual employee expenses. After all, you do want to adequately
reimburse employees to cover work-related expenses, but without overcompensating
them and creating tax waste.  

For more details, read our full guide on employee mileage reimbursement rules.
Remember: Everlance cannot provide legal advice for your company—this is for
informational purposes only. If you have specific questions about your company’s
legal obligations, we advise you to consult a legal professional. 


2. USE DATA TO DETERMINE A FAIR MILEAGE REIMBURSEMENT RATE

How should you decide how much to reimburse employees for mileage? 

Many businesses structure their reimbursement policies around the IRS standard
mileage reimbursement rate. This provides a reasonable reimbursement for
employees and ensures that both employees and employers do not have to pay taxes
on this reimbursement. 

The IRS standard reimbursement rate is not a requirement for businesses, simply
a recommendation. If your business operates in a part of the country where costs
are lower than average, you might consider lowering your rate. 

On the other hand, if your business operates in a part of the country where gas
and tolls are more expensive than average, you may want to consider reimbursing
at a higher rate. However, if you do choose to reimburse employees at a rate
that exceeds the IRS standard rate, the excess income (any amount above the IRS
rate) is taxable for employees. 



In short, it can be helpful to take a careful, data-driven look at an employee's
actual expenses based on mileage driven, the costs in your area, and what
out-of-pocket expenses—such as maintenance and insurance—employees are
incurring. This will help you create a data-driven vehicle program that
reimburses employees fairly while eliminating tax waste. 


3. KNOW YOUR STATE’S RULES AROUND REIMBURSEMENT 

Of course, just because there’s no federal mileage reimbursement law doesn’t
mean that individual states can’t say otherwise. As of 2022, only California,
Massachusetts and Illinois require employers to reimburse for mileage. Here’s a
breakdown of what’s required: 


CALIFORNIA 

California-based employers are required to reimburse employees for all
work-related expenses, including mileage. In order to reimburse employees for
driving-related expenses, California employers can provide: 

 * A flat-rate stipend 
 * A mileage reimbursement program (such as CPM or FAVR) 
 * Actual expenses reimbursement 

Most California employers reimburse employees at the IRS standard rate, in order
to keep their programs tax-free and straightforward. However, this is not a
requirement, as long as employee expenses are being covered. 


ILLINOIS 

Effective since 2019, all Illinois employers must reimburse employees for all
work-related expenses, including mileage and/or vehicle costs. 

Employees in Illinois should be reimbursed at the IRS standard mileage rate, or
the rate of their actual expenses, if higher than the IRS mileage rate accounts
for. 

Employers in Illinois that provide a flat-rate allowance or stipend for
employees must ensure that the stipend covers employees actual costs and avoid
accidentally under-reimbursing employees. As a result, it’s recommended for
employers in Illinois to use a data-driven program, such as FAVR, or have
employees keep careful records of all vehicle-related expenses. 

A mileage tracking app like Everlance is an easy way to track employee mileage
accurately and ensure that employees are neither being over- or
under-reimbursed, keeping your company’s reimbursements tax-free and in line
with current requirements. 


MASSACHUSETTS

Employers in Massachusetts are required to provide employees with “compensation
for all travel time and shall be reimbursed for all transportation expenses.”
For employees that are tasked with driving from one location to another during
the course of their workday or shift, Massachusetts law requires that they are
compensated for their time as well as their mileage or vehicle expenses. The
standard IRS rate is recognized as a fair amount for reimbursement. 


4. MAKE MILEAGE REIMBURSEMENT A TRUE PERK FOR EMPLOYEES

Of course, if you’re providing mileage reimbursement as a perk for employees,
the legal requirements are only one piece of the puzzle. 

The Great Resignation has exacerbated the labor shortage, which means that
providing a work environment and benefits that help employees feel valued and
supported are more important than ever. As of June 2022, there were 11.4 million
job openings in the US and only 6 million unemployed workers—which means lots of
jobs unfilled with no workers to fill them. 

How can you make sure that your vehicle program is a real benefit for employees
that improves retention? Transparent, flexible, data-driven vehicle programs
stand out among both new and existing employees because, in this case, the
benefits are: 

 * Transparent: employees know exactly what they can expect to be reimbursed
   for, what it covers, if it’s tax-free, and so on. 
 * Flexible: the program provides them with benefits they want and need, that
   are relevant for their role
 * Data-driven: programs that are based on real, data-driven calculations are
   fairer for drivers. When employees understand how and why they’re being
   reimbursed as they are, they’re far more likely to feel more satisfied with
   the program. 


5. FIND THE RIGHT PROGRAM FOR EACH ROLE

While a transparent, data-driven program is a great way to make it a good
benefit for employees, it’s important to consider the right type of vehicle
program for different roles at your company. As with other forms of compensation
and benefits, one size does not fit all. 

When designing your vehicle program, you should ensure that the benefits match
the worker’s roles, expenses and location. 

For example, it might make sense for seasonal workers to receive a smaller
benefit or more flexible benefits due to the high turnover within those roles.
For roles like these, a mileage reimbursement program such as CPM—which is easy
to on- and off-board employees quickly, provides quick reimbursement turnaround
and is simple to execute—is probably your best option. 

On the other hand, for employees like sales reps, who are much more important to
retain long-term for your company, might require a more detailed, data-driven
approach. For fair reimbursements for the employee without over-spending,
data-driven programs like FAVR are the best option. FAVR programs take into
account employee location, actual costs in that area, type of car driven,
mileage driven, insurance costs and more to create a fair fixed and
mileage-based reimbursement each month that adjusts based on fluctuations in
costs.

Company car programs or car allowances might be a better option for senior-level
employees or extremely high mileage drivers for whom you want to provide a
higher benefit or reduce the need for reimbursements. For high-mileage
employees, company cars or allowances can provide more budget control, as CPM
programs often over-reimburse high mileage drivers.




6. KEEP THE PROGRAM FLEXIBLE TO REFLECT FLUCTUATING COSTS FOR EMPLOYEES

Finally, if mileage reimbursement is a job benefit for your employees, it’s
important for both you and your employees to keep the program flexible.

As discussed above, a flexible program not only helps provide a real benefit for
employees, but it also helps you ensure that your employees are not being
over-compensated, thus ensuring your program stays tax-free and reducing company
costs.

Some flexible vehicle programs, such as FAVR programs, provide a flat-rate
monthly “allowance” based on fixed costs, such as insurance and depreciation,
while also providing a reduced reimbursement based on mileage. Programs like
this help your company adapt to fluctuating costs and changing priorities by
reducing reimbursements when costs are lower. In addition, when costs are
higher, you can make sure you’re not shortchanging employees either.


MAKE MILEAGE REIMBURSEMENT EASY WITH EVERLANCE 

In short, there are a lot of layers to consider if you’re considering mileage
reimbursement as a job benefit.

From flexibility and data-driven programs to ensuring you understand both state
and federal requirements for mileage reimbursement, plus having employees in
different roles and situations, Everlance is here to make sure your mileage
reimbursement program stays IRS-compliant, tax-free and beneficial for you and
your employees.

Ready to learn more about how Everlance can simplify your mileage reimbursement
benefits? Schedule a 15-minute consultation call today.

Let's talk!





TEAM EVERLANCE

We help people save time and money. At Everlance, we're on a mission to empower
mobile workers and businesses. That sometimes leads us to generalize tax
information. Everlance team members are not certified tax professionals. If you
need help with your specific tax situation, please reach out to your tax
advisor.

See All Posts
 1. How does Everlance work?
 2. 
 3. 

More from Our Blog


YOU MIGHT ALSO LIKE

Everlance Business



SMALL BUSINESS MILEAGE AND EXPENSES: A COMPLETE GUIDE

Running a small business can be complicated—that's why we created this guide.
Learn more about small business mileage and expense tracking and how it can help
your business.

Posted on 
Aug 11, 2022
  by
Team Everlance
Everlance Business



EVERLANCE VS. COMPETITORS: 6 KEY FACTS YOU NEED TO KNOW WHEN COMPARING VEHICLE
PROGRAM PROVIDERS [+INFOGRAPHIC!]

Is your vehicle program provider worth the cost? Get the facts you need to
compare providers when it comes to program options, pricing and more.

Posted on 
Jun 22, 2022
  by
Team Everlance
Everlance Business



VEHICLE PROGRAMS AMONG BEVERAGE DISTRIBUTORS: 6 STATS YOU NEED TO KNOW
[+INFOGRAPHIC!] | EVERLANCE



Posted on 
Jun 17, 2022
  by
Team Everlance
Back to Blog
Subscribe to our Newsletter


GET NEW POSTS TO YOUR INBOX

A successful marketing plan relies heavily on the pulling-power of advertising
copy. Writing result-oriented ad copy is difficult. 

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.



GET STARTED

Get a demoGet the appPricingLoginSign up

SOLUTIONS

Self-employedBusiness

COMPANY

About UsHelp CenterResource HubJobsTerms of ServicePrivacy

CONTACT US

support@everlance.com(872) 814-6308 USA(877) 704-2687 CAN
Copyright 2022 Everlance