IRS INCREASES MILEAGE REIMBURSEMENT RATES FOR BUSINESS TRAVEL

|

Despite the recent decrease in gas prices throughout the county, late last week the Internal Revenue Service published its revised guidelines for mileage reimbursement which went are scheduled to go into effect on January 1, 2015. For business-related travel in an employee's personal vehicle, the reimbursable rate increased to 57.5 cents per mile, an increase of one and one-half cents from the rate which had been in effect since January 1, 2014.

In California, an employer is required to indemnify its employees for all "necessary expenditures or losses" incurred by the employee in direct consequence of the discharge of his or her duties (Cal. Labor Code §2802). If an employer reimburses the employee at the IRS approved rate, that payment is presumed to be sufficient. If an employer chooses to reimburse the employee at a rate other than the IRS approved standard, the burden falls squarely upon the employer to establish that the rate was adequate under the circumstances to reimburse the employee for his/her actual business-related expenses. As such, it is recommended that, except under very limited circumstances, California employers should reimburse at the IRS-approved rate.

Categories: 
Share To: