What are Mileage Expenses?

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  • Written By: Norma Jean Howland
  • Edited By: Susan Barwick
  • Last Modified Date: 28 March 2020
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Mileage expenses are usually work-related travel expenses, arising from the use the employee’s personal car or a company car, for gasoline purchases. Usually, employees who travel keep track of their auto mileage, so that they can be reimbursed for money spent on gasoline. This kind of expense is similar to that of other business travel related expenses, such as hotel or airfare, except that this expense also includes work-related local driving. Employees are usually required to keep track of actual miles driven for work purposes, by keeping track of odometer readings between trips, for which they are then reimbursed by the company.

Usually business travel expenses are noted in a chart, log or computer program in order to keep a running total of mileage expenses. Employees then submit their mileage expenses to their employer. Quite often, employers require their workers to keep receipts to verify that the money spent was for gasoline. This is usually done on a regular basis — weekly, monthly or quarterly — so that record keeping is manageable for both the employee and the company.


Since gas prices tend to fluctuate, employers usually have a gas rate allowance per mile, which tends to vary, based on a number of factors. Depending on the business or organization, this standard rate, may or may not be regulated by some governmental agency. Mileage expenses are reimbursed by taking the actual mileage driven and multiplying it by the dollar amount allowed. Sometimes a company will issue a credit card just for this kind of expense, which makes record keeping much simpler on both sides.

When employees keep records for mileage expenses, they are usually required to record odometer readings. The company may or may not verify these readings, but sometimes companies spot check to keep their employees honest. With the help of the internet, figuring out mileage from different towns, states or even countries may not be so time consuming as it was in the past.

In addition to managing mileage expenses, keeping receipts for automobile expenses may also help the employee at tax time, when certain deductions may be taken if a personal car was used for business purposes. If a large amount of travel is needed, wear and tear of the automobile may also be taken into consideration. Sometimes an employer will pay for some kind of upkeep on the car, and may reimburse employees for certain kinds of maintenance expenses, depending on company policy.



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