IRS has pumped it up again

In a December 10, 2014 directive, the Internal Revenue Service (IRS) has increased its optional standard mileage reimbursement rate for an employee’s business use of his or her vehicle from 56 cents in 2014 to 57.5 cents in 2015.

The government calculates the mileage rate by an annual study of the fixed and variable costs of operating an automobile, including insurance, repairs, maintenance, gas and oil.

Under California Labor Code section 2802, employers must reimburse employees for all actual work-related expenses necessarily incurred. Many employers choose to use the IRS mileage reimbursement rate to satisfy their reimbursement obligation.

According to California’s Division of Labor Standards Enforcement, using the IRS mileage reimbursement rate will generally satisfy an employer’s reimbursement obligation absent evidence demonstrating otherwise. For example, if the employee can show the IRS reimbursement rate does not cover all of his/her actual and necessary business-related vehicle expenses, the employer must pay the difference.

For further information and assistance, contact one of our attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin.

See our related blogs:

New 2010 IRS Mileage Rate
IRS Announces New Standard Mileage Rates
Mileage Reimbursements for 2013
IRS Mileage Reimbursement Rates for 2014

Cindy Bamforth, December 19, 2014