Is your business reimbursing the right rate?
For some companies, a cents-per-mile rate can be a good mileage reimbursement option. It’s easy to administer and works well for companies with either a small mobile workforce of low-mileage drivers, or employees in relatively the same geographic area.
In those instances, Motus offers a way to save time and reduce administrative burden. Companies increase accountability with GPS-verified mileage logs and save employees time in the field by automating the mileage logging process.
A lot of companies want to know how to calculate mileage reimbursement specific to their mobile workforce. On the Motus Platform, you can use the IRS Safe Harbor Rate, your own rate, or have Motus calculate a custom mileage reimbursement rate for you.
Where Cents-Per-Mile Rates Fall Short
In most cases, cents-per-mile rates over or under reimburse employees. Geographic costs of owning and operating a vehicle can vary drastically between regions or even neighboring states. Someone in a high-cost location like Chicago, IL could be significantly under reimbursed in comparison to someone in Jacksonville, FL. The cost variances also incentivize employees to either drive more to increase their monthly reimbursement, or less if the pay per mile won’t cover their actual costs.
Even the IRS Safe Harbor Rate Gets It Wrong
Currently at 57.5 cents per mile, IRS Safe Harbor Rate is based on the average cost of operating a vehicle in the previous year and it isn’t recommended as a method of mileage reimbursement by the very institution that created it.
The Solution: An Individualized Reimbursement Program
It’s clear that companies using a cents-per-mile rate to reimburse their entire workforce are creating winners and losers within their organization. Their mileage reimbursements simply aren’t calculated to reimburse their mobile employees fairly or accurately.
Individualized programs are tax-free and reimburse mobile employees based on the unique costs of where and how much they drive. The Motus mileage reimbursement calculator makes finding the right rate easy. Stop losing cents-per-mile. Individualized reimbursements save on your bottom line. Learn more about how your business can fairly and accurately reimburse its mobile employees.