Does a company have to match IRS standard mileage rates each year?
“You are not required to use the IRS mileage rate as your standard reimbursement amount. Most companies use it since it’s often perceived by employees as a standard. Some companies have paid less than the standard rate based on their own policy and what they felt was reasonable. If you reimburse at a higher rate than the IRS, then you may have a taxable income amount to the employee and possibly a portion of the reimbursement as a nondeductible expense for the company. You should seek the advice of your tax advisor for your particular situation. The current rate is at 51 cents per business mile driven. We have a table of recent IRS mileage rates here. Our January 2007 T&E benchmark report found that 87 percent of organizations use the IRS standard mileage rate for reimbursements; 12 percent reimburse at a rate below the IRS standard, and just under one percent reimburses above the standard mileage rate. As seen in the survey results, there are companies that don’t reimburse at the full
