April 2018 brought an 11-cent increase in the average fuel price across all states, but have you ever stopped to consider the impact of local gas prices on your employee mileage reimbursement rate?
With the average fuel price in California commanding a steep 47% premium over the price in Texas, local pricing variations are an important consideration to bear in mind for organizations with a mobile workforce. Despite the wide variations in gas prices between states, the IRS has just one recommended rate for mileage reimbursement right across the country.
The AAA Gas Price website is a useful resource for checking the statewide and nationwide average fuel price, so you can ensure employees are being fairly and equally treated. In states with a higher gas price, pressure to pay the full IRS recommended rate will be correspondingly higher. While gas is only one part of the total cost of running a vehicle, that cost will be substantially higher for employees in states such as Pennsylvania, Nevada, Oregon, and (of course) California.
Falling Unemployment Means Greater Focus on Worker Compensation
With the cost of living continuing to increase, and a tightening labor market, employees are becoming increasingly aware of the significance of the rate their employer reimburses them per mile. After many years of job seekers constantly updating their CV in the hopes of finding someone willing to take them on, the balance is starting to shift. Falling unemployment means employers are increasingly having to offer a more competitive package to recruit and retain workers.
The tightening labor market also has the effect of increasing the time and money investment required for organizations to recruit and train new employees. Increasingly, staff are taken on with no prior experience in the role which they will play for their new employer – meaning more training is required than would otherwise be the case. All of this means that talent retention is more important than ever. Organizations that can’t or won’t adapt to this new reality may find themselves losing key members of staff and facing stiff competition to recruit replacement workers.
How to Ensure Efficient Mileage Reimbursement – Wherever You Operate
There is a way that employers can offer their workers a higher reimbursement rate per mile, while still saving time and (on average) money overall. It’s called SureMileage – the smart software by CompanyMileage, created with the express purpose of making employee reimbursement simple, fair, and efficient.
With SureMileage, employees report the starting point and destination of each trip they are going to undertake on behalf of their employer. The system then automatically calculates the driving distance between those points. Instead of verifying the miles driven, SureMileage calculates expenses to be reimbursed.
Once travel data goes into SureMileage, supervisors can quickly review and approve expenses and send them to accounting and payroll for reimbursement. In short, it is a system designed to focus everyone involved on the equitable reimbursement of expenses to be incurred rather than the stressful and laborious exercise of verifying employee claims based on odometer readings and little else.
Accurate, On Time, Smart Reporting
Automated mileage tracking virtually eliminates the inaccuracies common in traditional odometer readings and manual reporting. Point-to-point reimbursement of business travel also eliminates side trips and other IRS-disallowed travel from the reimbursement equation. Mobile employees can easily input mileage and save new destinations for the future, using the convenient and secure mobile app.
The cost savings for employers vary widely but are typically can be 25 to 30%. You can calculate your organization’s potential savings on mileage reimbursement costs by clicking here, or call us 877-677-0377 to schedule a live demo today.