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What’s a Mileage Reimbursement or Cents-Per-Mile (CPM) Program?

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UNDERSTANDING BUSINESS VEHICLE PROGRAMS: WHAT'S A MILEAGE REIMBURSEMENT OR CENTS-PER-MILE (CPM) PROGRAM? Mileage reimbursement, or cents-per-mile (CPM) programs, are a very common business vehicle reimbursement option. In fact, 79% of organizations use cents-per-mile for at least some of their employees. Under a cents-per-mile program, businesses reimburse mobile workers at either the IRS business mileage standard – a national, standard rate used to calculate the deductible expenses of using a vehicle for work – or set a custom rate. This program requires employees to log business miles. Mileage logs justify their reimbursements and account for mileage capture accuracy in case of an IRS audit. To meet IRS criteria, mobile workers must report every trip's: With these requirements fulfilled (and the cents-per-mile rate at less than or equal to the IRS business mileage standard) reimbursements can be tax-free for employers and mobile workers. It's important to recognize that the IRS standard mileage rate is based on averages, not necessarily the unique costs of driving in any specific location. This compels many organizations to set more realistic, custom rates for their workforce. START LOCATION END LOCATION TIME & DATE REASON FOR TRAVEL TOTAL DISTANCE

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