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The mileage formula
reimbursement = business miles × rate per mile
Simple math with one trap: the rate changes every year (the IRS announces it each December), and employers sometimes keep paying last year's. A few cents per mile sounds trivial until you drive 8,000 business miles — a 3¢ gap is $240.
A worked example
120 miles of client visits at $0.70/mile is $84 — tax-free with a log. Driving that weekly, it's roughly $4,370 a year, which is the point of the annualize option above: per-trip amounts look small, and yearly totals are what make the case for actually submitting every trip.
If your employer doesn't reimburse
Since 2018, W-2 employees can no longer deduct unreimbursed mileage on federal taxes — if the company won't pay, the cost is simply yours, which is worth raising politely with the annual number in hand. Self-employed drivers still deduct business miles at the standard rate on Schedule C. Traveling for work with a daily allowance? The per diem calculator covers meals and lodging stipends.
Frequently asked questions
What is the IRS standard mileage rate?
A per-mile figure the IRS publishes each year (find the current one at irs.gov — search 'standard mileage rates'). It bundles gas, maintenance, insurance, and depreciation into one number. Employers commonly reimburse at exactly this rate because it's the maximum that stays tax-free.
Is mileage reimbursement taxable?
Not if it's paid under an accountable plan at or below the IRS rate with documented business miles — then it's tax-free money. Reimbursement above the IRS rate, or paid without documentation, is taxable wages.
Do employers have to reimburse mileage?
Federal law doesn't require it (unless unreimbursed costs would drop you below minimum wage), but California, Illinois, Massachusetts and a few other states require reimbursement of necessary business expenses, which includes mileage.
What counts as business miles?
Driving between work sites, to client meetings, on errands for the employer — but not your regular commute from home to your usual workplace, which is never deductible or reimbursable.