Maximize Your Mileage Reimbursement

How mileage tracking helps you maximize mileage reimbursements 

For drivers, missing a drive in a mileage log means lost savings. While accidentally adding a personal drive or incorrect mileage can lead to a loss of trust with the employer — an equally negative outcome. 

For employers, accurate mileage tracking ensures that employees get the correct reimbursement for mileage, which also helps build trust and ensures tax compliance. In other words, making sure mileage reimbursements are all accounted for benefits everyone in an organization.  

There are a few different ways to manage mileage tracking:

Manual mileage tracking

A spreadsheet, a notebook, or a notes app on the driver’s phone — these work well enough for someone who only uses their car for business drives once in a while. But if mileage reimbursement is a regular part of someone’s worklife, these methods fail pretty quickly. It’s too easy to forget to update a mileage log before starting or ending a trip, and it’s even easier to note down the mileage wrong and cheat yourself out of savings. 

This way of keeping business mileage reimbursements is also problematic for employers, who will need to deal with extra admin work verifying different spreadsheets or deciphering handwritten logs. 

Automated mileage tracking

Mileage tracker apps, including MileIQ, automatically record your trips using location data on your phone. This comes with a number of advantages: 

• No start and stop: Drivers don’t need to remember to update a mileage log 
• Details like addresses, dates, and total mileage are tracked and calculated automatically
• Reports are always in the same format and can be created with a tap, which saves time for both drivers and employers. 

How to keep an effective mileage log for accurate reimbursements 

To get the highest business mileage reimbursement possible, you need to keep an A+ mileage log: one that has all the verifiable details and is easy to read for your manager and payroll processor. 

Here are key details you should capture for each business drive: 

• Date of each drive (and possibly time, depending on your company policies)
• Starting odometer reading
• Ending odometer reading
• Total miles driven 
• Purpose of each trip (client meeting, site visit, sales presentation, vendor/supply run)
• Starting and ending location addresses

Tracking all of this information by hand can be pretty cumbersome, but thankfully a mileage tracking app can usually note a lot of these automatically — including dates, addresses, and total mileage. In the case of MileIQ, you’ll also get an estimate value on your mileage (how much your mileage reimbursement may be for each drive).

Tips for effective mileage tracking

Whether you track mileage with an app or pen and paper, follow some of these best practices to get maximum mileage reimbursements every time. 

• Track trips daily: Don’t put off going through your mileage log, especially if you have a travel-heavy week coming up. Human brains can only hold a few pieces of information at a time — and chances are the details of your trip will be pushed out by all the other things happening in your day. Of course, if you use an automated tracker, you don’t need to worry about updating a mileage log at all.
• Keep business and personal trips separate: This can be tricky with a personal car, but make sure your drives to the grocery store or school pick-up don’t make it into expense reports. MileIQ allows drivers to classify drives with a swipe at the end of each trip or automate it based on work schedule.
• Maintain clear and concise records: Even if you already received a mileage reimbursement, hold on to your records, in case there’s a discrepancy or dispute in the future. If you log miles into a company spreadsheet, make sure you keep your own records as well. MileIQ drivers have access to their mileage records in the app before and after submitting a report. 

You can learn more about good mileage tracking practices in this comprehensive guide.

Mileage and reimbursement: Understanding the basics

How much you receive in mileage reimbursements depends on two factors: the number of miles you drove and the mileage reimbursement rate used by your company. 

If you’re in the US, the IRS sets a standard mileage rate each year. As long as your company reimburses you at or below this standard mileage rate, your reimbursements don’t get taxed (yep, you get tax-free money by driving for work in this case). 

Your company can also reimburse you at a higher rate, but the portion of your reimbursement going over the standard rate will be taxed like regular income. 

How mileage reimbursement works 

There are four different steps in mileage reimbursement: Mileage tracking, mileage reporting, mileage verification and approval/rejection, and payment. 

Four steps of mileage reimbursement 

Mileage reimbursement step

Completed by 

Can be automed?

Mileage tracking

Employee (the driver)

Yes, with an automated mileage tracking app

Mileage reporting

Employee (the driver)

Yes, with an automated mileage tracking app

Review, verification, approvals

Employer 

Partially, with tools that make drive review easier and faster 

Payment

Employer

Partially to fully, depending on company policy

Business mileage reimbursement: Benefits for companies

As mentioned in the intro, a few states require employers to compensate employees for out-of-pocket expenses. However, reimbursing employees for business mileage is not just a matter of compliance; it also offers several benefits for businesses:

Improved morale: Fair and timely reimbursement demonstrates employee appreciation and fosters a positive work environment.

Increased productivity: Streamlined reimbursement processes can reduce administrative burdens and allow employees to focus on their work.

Peace of mind in tax compliance: Diligent mileage records help you deduct the proper amount on business taxes and protects you in case of an audit.