Effective January 1, 2025, the standard mileage rates for use of a car, van, pickup, or panel truck will be 70 cents per mile, which is an increase of three cents from 2024. Therefore, employers are advised to reimburse employees who use their own personal vehicle for work purposes based on this new IRS rate, as it will be deemed reasonable and sufficient for purposes of reimbursing employees for work-related expenses pursuant to Labor Code section 2802.

Alternatively, if employers use some other method for reimbursing their employees for the use of their personal vehicle for work purposes, they must ensure that they fully compensate employees for their travel-related costs, including fuel, insurance, repairs, and depreciation. Note that simply providing employees with a fuel card for gas does not fully reimburse them for the use of their car, as fuel is only one component of the reimbursement requirement.

If you have any questions regarding reimbursement requirements for employees who use their personal vehicle for work, contact our employment attorney Scott Liner at [email protected].

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_{Please note that this article is for informational purposes only and should not be considered legal advice and does constitute an attorney-client relationship. It is recommended to consult with an attorney and your insurance carrier directly for specific guidance pertaining to your business and its practices.}