Mileage reimbursement

Compensation for using a personal vehicle for work at a set rate per kilometre/mile. Rather than reimbursing actual fuel or wear-and-tear costs, companies typically apply a standard rate — often aligned to a national guideline — multiplied by the distance driven for business purposes. Employees usually need to log trip distance and purpose to support a mileage reimbursement claim.

Many countries publish official mileage rates that are free of tax up to a certain level — for example, rates set by HMRC in the UK or the IRS in the US — and companies often use these as the basis for their own policy. The rate is intended to cover all vehicle costs, including fuel, maintenance, insurance and depreciation. Some companies use different rates for cars, motorcycles and bicycles, or adjust them as fuel prices change.

Mileage claims are simple in principle but can be difficult to verify. Employees need to record the start and end points, the business purpose and the distance, and finance teams need to check that the distance is reasonable and that commuting is excluded. Digital tools that calculate distances automatically help reduce errors. Companies also compare mileage costs with alternatives such as rental cars, taxis or public transport, which may be cheaper or safer for longer journeys. Companies should also consider duty of care, since employees driving long distances after flights or meetings face higher fatigue and accident risk.

Tumodo offers companies alternatives to personal vehicle use for business trips. Car rental, car transfers in different classes and taxis can be booked on the platform, with travel policy rules such as car classes, maximum cost per day or per trip, and allowed tariffs. Rail tickets across Europe are also available for longer journeys. All ground transport costs are paid centrally and appear in the same reports as the rest of the trip, making them easy to compare with mileage claims.