Mileage Reimbursement Definition

Term Definition
Mileage reimbursement refers to the refund of the mileage costs associated with the use of employees’ private vehicles for business purposes. The IRS announces a rate each year, on the basis of which employees are reimbursed by their employers.

Extended Definition
Employees may be required to drive their own vehicles for business trips. The expenses involved in the use of private vehicles for business-related purposes are required to be refunded to employees, under the mileage reimbursement regulation established by the IRS. The rate set by the government can vary each year, and is dependent on factors such as gasoline prices. The government mileage rate spans three categories – business miles, use of vehicles for moving or medical purposes, and miles driven while serving charitable organizations.

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