Policy templates · TXT
Mileage policy template
Complete mileage reimbursement policy — ready to customize with your EIN and internal rate.
Every company that reimburses mileage needs a written policy — without one, each case becomes a one-off negotiation, generates disputes with finance, and exposes the company in labor audits. This template covers the 8 blocks we recommend to clients: eligibility, per-mile rate, calculation, substantiation, deadlines, exceptions, approval, and annual review. Download the text file, open in Word or Google Docs, replace the bracketed fields with your reality, and publish in the employee handbook.
When to use this template
Use it if your company reimburses employees, contractors, or vendors for using their own vehicle in business activities. Equally suited to companies of 5 or 5,000 — the structure is the same, only rate and limits change. Special attention for companies paying flat car allowances: the IRS requires a clear distinction between actual-expense reimbursement (non-taxable) and a flat allowance (taxable as wages). The policy must make that distinction explicit, or the entire reimbursement can be reclassified as wages in an audit.
How to customize in 5 steps
- 1. Replace the header — Swap [COMPANY NAME], [EIN], and [EFFECTIVE DATE] with your data. Version with a date — e.g. v2.0, effective 01/01/2026.
- 2. Set your per-mile rate — Default suggestion is the IRS standard rate (currently $0.70/mile for 2025). Adjust with documented justification if your sector's real cost is materially different.
- 3. Set the limits — Recommended monthly cap (e.g. 1,500 miles per employee) and allowed purposes (client visit, equipment transport, external training).
- 4. Set the approval flow — Who approves? Direct manager, regional manager, HR? Specify the role, not a person, so the policy ages well.
- 5. Publish and train — Share via your HRIS, request digital acknowledgment, and train managers. Reopen annually to review the rate.
Common pitfalls
- Confusing reimbursement with allowance — A flat car allowance hits payroll as wages and generates payroll taxes. Variable per-mile reimbursement does not — provided it is substantiated by a log.
- No monthly cap — Without a cap, some employees may report mileage well above team average, driving costs out of control.
- No submission deadline — Out-of-period submissions disrupt accounting close. Set a deadline (e.g. by the 5th of the following month).
- Not reviewing annually — Fuel inflation and regulatory changes require annual rate review. Include a review clause.
Frequently asked questions
- Can I cover employees and contractors in the same policy?
- Yes. The template has a section for each. Employees need a no-wage-incorporation clause; contractors need it referenced in their MSA.
- Must the rate be the same for everyone?
- No, but differences must be justified (e.g. regions with higher tolls, required vehicle category).
- Do I need legal approval?
- We recommend a review by your legal team or CPA before publishing — especially the tax clause.
- Is it a DOC or PDF?
- Download is plain text (.txt), which opens in Word, Google Docs, and LibreOffice with structure intact. Paste, format, and export as PDF if you prefer.
- Do you have a fleet version?
- This policy covers employee-owned vehicles. For company-owned fleets, pair this template with our company-vehicle-use policy (in development).
After adopting the policy, consider implementing our online calculator: it automatically applies the rules (rate, cap, purpose) and generates audit-ready, numbered receipts — eliminating friction between employees and finance.