How does mileage reimbursement work?

When an employee uses their personal car or van for day-to-day business activities, they can claim back the cost without paying income tax. Mileage reimbursement isn’t designed to cover commuting to and from work. It only covers journeys that employees are requested to make during work, specifically those with a business purpose.

Is mileage reimbursement mandatory for companies?

In short, no. In most countries there is no requirement by law to reimburse an employee’s mileage or other travel expenses. However, many companies do, as a matter of good practice.

Who sets the mileage reimbursement rates?

Although each country has its own standard mileage allowance, the rates can differ depending on each company and how much they choose to pay back their colleagues. Companies can also set their own mileage reimbursement policies.

Can companies reimburse a higher amount than the standard mileage rates?

Yes, companies can choose to reimburse a higher amount than the standard. However, this does come with its own rules and regulations. For example, in the U.S. and UK, if they exceed the standard mileage rate, the reimbursement will count as regular wages and lose its tax benefits (if they go below the rate, employees in many countries can deduct their difference when filing their tax return).

Mileage reimbursement calculator

Having employees use their own vehicle for work can be expensive. Especially if they regularly drive long distances and spend money on fuel. Now you can quickly calculate how much your employees can get back with our easy-to-use mileage reimbursement calculator.

Calculate for free

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Enter the miles driven to see how much money you can get back.

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Cars and vans

miles

Motorcycles

miles

Bikes

miles

Results

Total miles driven- miles

Total estimated mileage deduction£ -

	Cars and vans	Motorcycles	Bikes
First 10,000 miles
Above 10,000 miles

Above 10,000 miles

Cars and vans

Motorcycles

Bikes

First 10,000 miles

Cars and vans

Motorcycles

Bikes

Above 10,000 miles

Cars and vans

Motorcycles

Bikes

First 10,000 miles

Cars and vans

Motorcycles

Bikes

	First 10,000 miles	Above 10,000 miles
Cars and vans
Motorcycles
Bikes

Bikes

First 10,000 miles

Above 10,000 miles

Cars and vans

First 10,000 miles

Above 10,000 miles

Motorcycles

First 10,000 miles

Above 10,000 miles

Bikes

First 10,000 miles

Above 10,000 miles

Cars and vans

First 10,000 miles

Above 10,000 miles

Mileage reimbursement rates in the UK

Each country has its own standard mileage allowance. The rate is updated every year by the countries tax authority and is meant to cover all costs of owning and running your vehicle for the business-use part of your driving.

	Cars and Vans	Motorcycles	Bikes
First 10,000 miles	45p	24p	20p
Above 10,000 miles	25p	24p	20p

Above 10,000 miles

Cars and Vans: 25p

Motorcycles: 24p

Bikes: 20p

First 10,000 miles

Cars and Vans: 45p

Motorcycles: 24p

Bikes: 20p

Above 10,000 miles

Cars and Vans: 25p

Motorcycles: 24p

Bikes: 20p

First 10,000 miles

Cars and Vans: 45p

Motorcycles: 24p

Bikes: 20p

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Frequently asked questions

: When an employee uses their personal car or van for day-to-day business activities, they can claim back the cost without paying income tax. Mileage reimbursement isn’t designed to cover commuting to and from work. It only covers journeys that employees are requested to make during work, specifically those with a business purpose.
: In short, no. In most countries there is no requirement by law to reimburse an employee’s mileage or other travel expenses. However, many companies do, as a matter of good practice.
: Although each country has its own standard mileage allowance, the rates can differ depending on each company and how much they choose to pay back their colleagues. Companies can also set their own mileage reimbursement policies.
: Yes, companies can choose to reimburse a higher amount than the standard. However, this does come with its own rules and regulations. For example, in the U.S. and UK, if they exceed the standard mileage rate, the reimbursement will count as regular wages and lose its tax benefits (if they go below the rate, employees in many countries can deduct their difference when filing their tax return).