Motus Articles

Losing Cents Per Mile: How Cents Per Mile Programs Can Cost You Millions

Issue link: https://resources.motus.com/i/1061945

Contents of this Issue

Navigation

Page 1 of 4

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2011 2009 2010 2012 2013 2014 2015 2016 2017 2018 ¢0 ¢10 ¢20 ¢30 ¢40 ¢50 ¢60 2017 2018 ¢50 ¢60 ¢53.5 ¢54.5 Jul 1- Dec 3, 2008 Jul 1- Dec 31, 2011 Keeping The Mobile Workforce In Motion So Why use Cents-Per-Mile Rates? Reimbursing mobile employees for business travel is complicated. Mobile workers accrue various expenses as they travel, from fuel and maintenance costs, to depreciation and insurance premiums, all of which must be closely tracked in order to accurately reimburse employees. Recognizing this burden, the IRS offers business travelers a cents-per-mile rate as a way to calculate the deductible expenses for these costs. Many companies choose the IRS Safe Harbor Rate (which was 53.5 cents per mile in 2017 and increased to 54.5 cents per mile in 2018) to avoid the challenges associated with tracking, documenting, and reporting the actual, incurred costs. Employers also have the option of determining their own rate, which can be reimbursed to employees tax-free as long as it's less than the IRS Safe Harbor Rate. TWENTY YEAR HISTORY OF THE IRS RATE The IRS Safe Harbor Rate and individual cents-per-mile rates options are simple ways to reimburse employees and avoid creating any significant administrative burden or tax-implications. However, neither provides accurate reimbursements. And both can cost employers thousands of dollars per employee each year.

Articles in this issue

Archives of this issue

view archives of Motus Articles - Losing Cents Per Mile: How Cents Per Mile Programs Can Cost You Millions