If your company has employees on the move, one of your concerns is likely how to reimburse them for the miles they drive for business. Whether employees are transporting patients to a hospital, moving construction equipment, delivering packages or food, or doing any other number of jobs that require them to drive, it’s essential that they accurately keep track of their vehicle mileage, and that they’re being reimbursed appropriately.
Many businesses use the IRS standard mileage rate to reimburse their drivers, but this is not the only method of gas mileage reimbursement, nor is it always the best choice for your business. When deciding how to go about your company’s mileage reimbursement, you’ll need to know how much the IRS mileage reimbursement rate would require you to pay your employees, and use that to determine whether or not an alternative reimbursement plan would better suit your company’s needs.
What is the mileage reimbursement rate for 2020?
As 2019 comes to a close, you may be wondering what the 2020 IRS standard mileage rate will be for the coming year. Starting January 1, 2020, the IRS Standard mileage rate for transportation and travel expenses has declined to 57.5 cents per mile from 58 cents per mile in 2019.
2020 IRS Standard Mileage Rate
|2020 Standard Mileage Rate|
|Business Mileage||57.5 cents|
|Medical & Moving Mileage||17 cents|
|Charitable Mileage||14 cents|
What were the mileage reimbursement rates for 2019, 2018 & previous years?
When making an educated guess on what to expect for the 2020 IRS standard mileage rate, it helps to look at the IRS’s official chart of previous years’ rates, which shows the cent-per-mile reimbursement for 1997 – 2019. For the past decade, reimbursement rates for business miles have steadily remained in the 50s, reaching a high of 58 cents per mile in 2019.
In 2020 reimbursement rates for mileage have changed from 2019 to 57.5 cents per mile for business use, 17 cents per mile for medical and moving mileage and 14 cents per mile for charitable organization mileage.
IRS Standard Mileage Deduction Rates for 2020 and Previous Years
|2020 Standard Mileage Deduction Rate||57.5 cents|
|2019 Standard Mileage Deduction Rate||58 cents|
|2018 Standard Mileage Deduction Rate||54.5 cents|
|2017 Standard Mileage Deduction Rate||53.5 cents|
|2016 Standard Mileage Deduction Rate||54 cents|
|2015 Standard Mileage Deduction Rate||57.5 cents|
|2014 Standard Mileage Deduction Rate||51 cents|
|2013 Standard Mileage Deduction Rate||56 cents|
|2012 Standard Mileage Deduction Rate||55.5 cents|
|2011 Standard Mileage Deduction Rate(s)||51 cents
|2010 Standard Mileage Deduction Rate||50 cents|
How can I get my mileage reimbursed?
While most companies elect to use the IRS mileage reimbursement rate, the Fixed and Variable Rate (FAVR) is an alternative option that can potentially save your business money, although it is more complicated than a simple cent-per-mile rate. A FAVR plan provides reimbursement for employees who drive for business by combining mileage reimbursement with a monthly allowance, factoring in both fixed vehicle expenses — such as depreciation, insurance, registration fees, and taxes — and variable expenses — like gas, oil changes, tires, and routine maintenance.
FAVR reimbursement plans provide a more accurate and in-depth reflection of driving costs than the IRS standard mileage rate does. FAVR reimbursement is particularly appealing to drivers in states where operating a vehicle is more expensive, since it factors in the exact amount being spent on gas, unlike the IRS mileage reimbursement rate, which is the same across the nation.
Calculate Employee Mileage Reimbursement Savings
Our company mileage reimbursement calculator can help you do the math to compare the amount you pay your employees in gas mileage reimbursement using the IRS rate, with the amount you’d pay them using a FAVR plan. It factors in the number of employees driving, the average number of miles per driver per day, and the cent-per-mile reimbursement rate.
If you are looking to implement a FAVR reimbursement plan for your business, your company will need to meet a set of standards laid out by the IRS, namely the requirement that your employees drive more than 5,000 miles a year for business purposes. If you qualify under the guidelines listed and would like to set up a FAVR plan now, Everlance Teams, the number one highest-rated company mileage tracking app, can help you with that.
How Everlance Teams can help with 2020 mileage reimbursement
Everlance Teams takes pride in helping you customize a reimbursement plan that allows you to make optimal use of your company dollars. We use GPS data to monitor your employees’ car mileage through a system that tracks business miles separately from personal trips, and over 85% of companies who use Everlance say this makes their employee mileage reports more accurate than ever before. This data allows for wiser financial planning for your company. On average, Everlance users experienced a 70% reduction in cost per employee expense report.
At Everlance, we know that time is a valuable resource, and we’re happy to help you utilize it better. Our app saves your company time with a team admin dashboard that displays individual and team expenses, receipts, and company mileage all in one place, so you don’t have to spend hours searching through paperwork or computer files. A typical employee spends two hours fewer per month, tracking mileage reimbursement with Everlance.
Not only is Everlance Teams easy to use; it takes almost no time to set up. You can sign up for the app in seven minutes or less to get started on tracking your company mileage reimbursement today. Regardless of what kind of business you run, Everlance is committed to helping you establish the most efficient reimbursement plan for your company’s success.