Essay On Mileage Reimbursement

Many employees use their own personal vehicles to drive to different locations for their job. Because of this, it is important to understand what type of mileage reimbursement that they can receive, when they should get it, and how much money they are entitled to. This article will address all of these topics in detail according to information that is given by the IRS and other tax officials.

What is the Best Type of Mileage Reimbursement for an Employee to Get?

There are two different types of mileage reimbursement that a company can use. The first type pays the employee a set fee for each mile that they drive for business purposes. It does not cover the mileage to and from the job each day though. Employees are expected to cover this amount themselves. The second type of mileage reimbursement is a car allowance. This is most commonly used when an employee will be driving an excessive amount of miles for their job, which would make tracking them all very difficult. Instead of checks being made out to them each time that they travel, they receive a set amount of money on a quarterly basis. A business must have at least five employees for them to be able to offer this type of reimbursement though.

When is an Employee Entitled to Mileage Reimbursement?

According to the

However, most of them wait to pay it until the next pay period. As mentioned before, it has to be paid separately than an employee's paycheck. That is because it would throw off the payroll expenses. Also, the money that the employee is receiving isn't taxable since it isn't technically wages earned. So if an employer wanted to, they could offer cash reimbursements instead of checks. As long as the employer has a receipt that shows why they gave the employee cash, they can still use it as a deductible expense. Any money that is given for car allowances isn't