IRS Reimbursement

 

IRS Reimbursement

Our company currently pays the recommended IRS reimbursement when an employee uses their personal vehicle.  However, for trips over 120 miles, they are strongly encouraged to use a rental vehicle because it is cheaper for the company.  We have gotten resistance from some who do not want to rent a vehicle due to the inconvenience, unfamiliarity, etc.  I have heard of some employers who will allow an employee to drive their person vehicle in lieu of the rental but will only reimburse a much lower rate/mile because they had a choice to rent. 

 

Does anyone have this situation?  Pay varying rates or per diem for transportation only, etc?  Anything you could share would be appreciated. 

Anonymous (not verified)
Anonymous's picture

 

We don't do that now, but my previous employer did something like what you are talking about.  They would only pay the IRS reimbursement rate up to the annual breakeven point of providing a vehicle.  After someone passed the annual breakeven point, the reimbursement rate dropped to $0.10 / mile regardless of how many addiitonal miles they drove.  

Anonymous (not verified)
Anonymous's picture

The State of Oklahoma has a trip optimizer on its website that identifies which option (daily rental from Fleet Management or daily rental from Enterprise) is a better value to the state.  Fleet Management's rates are at (box truck) or below (Impala) the IRS mileage rates.  In most cases the Fleet Management rate is also cheaper than the Enterprise rate. 

A screen print of the trip optimizer result is required as an attachment to the travel claim by the employee.  Regardless what the employee claims, the Office of State Finance will only reimburse mileage at the "best value" rate from the optimizer.