- Home »
- Car Allowance
Consider the following scenario where your business reimburses two mobile employees the same flat amount of $400 each month for their business mileage. Both employees drive the same amount: 500 business miles per month and 6,000 business miles annually.
In this scenario, the employee in Baltimore is being over-reimbursed and the employee in Detroit is being under-reimbursed. How does this happen?Take for example car insurance premiums. In Baltimore, premiums are much less expensive than in Detroit – the average annual premium in Baltimore is roughly $2,423 and average annual premium in Detroit is $7,415.Your employee in Detroit is getting reimbursed far less than what they’re paying just to insure their vehicle. And your employee in Baltimore is viewing their reimbursement as extra compensation rather than the true cost of driving for business. The result? Unproductive employee behavior and mileage reimbursements that aren’t fair or accurate.
Reimburse your mobile workforce the true cost of driving for business.