What is mileage rate?

Mileage rate refers to the cost per mile traveled for job-related travel, which is typically reimbursed by employers to employees using their personal vehicles for business purposes. This rate covers not only fuel costs but also accounts for vehicle wear and tear, insurance, and other associated expenses of operating a vehicle. Employers often establish this rate to ensure that employees are fairly compensated for their travel expenses incurred while performing their job duties. The mileage rate can vary depending on factors such as changes in fuel prices and maintenance costs, and government agencies may set standard rates for tax deduction purposes.

Understanding mileage rate is essential for employees who travel for work, as it impacts their reimbursement claims and financial planning.