Oil Prices at 4-Year Highs – Will Mileage Reimbursement Be Affected?

Oil is surging again, breaking through the $70/barrel price point in May 2018. With this increase comes an inevitable rise in the pump price of gasoline, which has now reached a level last seen in 2014. It’s a good time for employers to consider the likely impact of this on mileage reimbursement for mobile workers.

While fuel only makes up about 30% of the per-mile cost of driving, the increasing prices at the pump have a significant impact on drivers, especially those who use their vehicles for work. Below is a historical look at Mileage Rates, Crude Prices and Average Fuel Prices. The IRS rate is set on January 1 each year and takes into account fuel prices for the year before, which may mean employers can expect an increase in the reimbursement rate come 2019 if gas prices remain high.

How Employers Can Avoid the “Rounding Up” Trap on Mileage Reimbursement

A typical system for managing company mileage reimbursement relies on employees filling out hand-written logs with mileage estimates, which are notoriously unreliable. With fuel prices rising and eating into employee disposable income, the temptation to “round up” the mileage estimate is only increased.

Even if the employee overestimates their distance by a fraction of a mile, when multiplied by the number of trips and the number of mobile employees, the end result can be many thousands of dollars in additional expense for the employer. This is exactly the problem that we developed our system, SureMileage, to solve – allowing employers to fully reimburse employees for their costs while also delivering huge time and material savings to the employer through increased accuracy of reporting.

How does SureMileage help you track and reduce these costs?

SureMileage is the complete mileage tracking solution for organizations with mobile employees that automates the mileage reimbursement process. The system uses a mobile app to allow employees to quickly and easily record their journeys on the go. This method is far more reliable than any manual systems, with precise point-to-point mileage calculations made automatically by our system. With SureMileage, administrators can now utilize a secure and accurate system that also integrates accounting and payroll.

The data is automatically fed into an expense reimbursement program, thus eliminating potentially inflated odometer readings. 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 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.