What's the "Right" Mileage Rate?

This is one of the most common questions we are asked. Well the answer can be simple, kind of...

First we look at 2 key questions; 1st What city are you located? 2nd Are you reimbursing for the type of car necessary for your business?

Let's explain. Mileage rates can be broken down as follows

  • 30% - Fuel
  • 45% - Depreciation
  • 6% - Maintenance
  • 19% - Taxes and Insurance

1st Where you are located is the biggest determinant for fuel; currently fuel prices range from $3.43 in El Paso, Texas to $4.35 in Chicago, Illinois (see current prices here http://gasbuddy.com/GB_Price_List.aspx?cntry=USA ) Gas alone can swing mileage rates by 10 percent per mile between these two markets.

2nd This one is trickier. The reality is the type of car your employee needs to do their job is not necessarily the type of car they drive.  If you provide home health care services then your employee may only drive a economy car, but they could easily be driving an SUV (big difference in mileage rates; the cost of driving an economy car vs. an SUV is in excess of 20 cents per mile).

To learn more about how mileage rates are determined visit our prior new article How Mileage Rates Calculated

To help create a customized mileage rate for your organization contact us today and we can discuss in more detail the best rate and there is no obligation or charge.

Just email us at sales@companymileage.com

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