Do you hate tracking your mileage? If so, you’re not alone. The process can be tedious and time-consuming, and sometimes you just don’t have the time to do it.
But that doesn’t mean you have to give up on tracking mileage for mileage reimbursement. There are a number of great apps available that make the process easy and hassle-free.
How do Employees Get Reimbursed for Mileage?
When employees travel for work, they may be reimbursed for mileage in the United States.
The process of getting reimbursement can be different depending on the company and the policy, but the general idea is that employees will submit their receipts and paperwork to their employer.
The employer will then calculate how much mileage was used and pay the employee back.
The 3 Methods of Mileage Reimbursement
Fixed Car Allowance
The employer pays the car allowance monthly, bi-weekly, or weekly as part of the employee’s paycheck, making it taxable compensation.
Expenses like insurance, maintenance, and fuel are covered under this car allowance. Because these allowances are not based on any driven mileage, they are not considered a reimbursement, but additional income under the company’s accountable plan. This means they are not tax-free.
IRS Standard Mileage Rate
The Internal Revenue Service has revised the old IRS mileage rate of 58.5 cents per mile, which was applicable between January until June 30, 2022. To be reimbursed for mileage in the second half of 2022, you can use the IRS standard mileage rate of 62.5 cents per driven mile for each vehicle.
F.A.V.R. (Fixed and Variable Costs)
Under this system, your car’s manufacturer sets a base price for a vehicle, and then you can claim a certain percentage of that price as a reimbursement for your total operating costs. However, the FAVR reimbursement system isn’t perfect.
- For one, it’s based on the car’s base price, rather than on the cost of operating your car. This means that car owners who have high fixed costs (like rent or a mortgage) will have to claim a lower percentage of their car’s base price than car owners who have lower fixed costs.
- And finally, the F.A.V.R. reimbursement system doesn’t take into account gas prices. This means that car owners who spend a lot of money on gasoline will have to claim a higher percentage of their car’s base price than car owners who spend less on gasoline.
How to Track Mileage
You can keep a mileage log. This will help you to track your mileage both on your vehicle and on your computer. You can also use a mileage tracking app on your phone.
When you’re tracking mileage on your vehicle, you should record the date, time, and location of each mile you drive. This will help you track your progress and to better understand your mileage rate and driving habits.
You can also track mileage on a mileage tracker app. To do this, you’ll need to create a mileage log. In this log, you should record the date, time, and location of each mile you drive. You can also track your speed, your average speed, and your total distance driven.
The best way to track mileage is to use a very simple mileage log app like MileageWise, as this is a tested way to track business miles.