Most Employers Pay Workers' Mileage Expenses; IRS Deductible Usually Influences Rate, BNA Survey Finds

5/20/2002

From: Karen James Cody of BNA, 202-452-4169, e-mail: kcody@bna.com Web site: http://www.bna.com

WASHINGTON, May 20 -- Very few workers must bear the cost of driving their own cars on company business, as nearly all employers surveyed by BNA Inc. (98 percent) compensate workers for business-related use of a personal vehicle. Although reimbursement levels are not uniform across organizations, most firms' mileage rates clearly reflect the influence of the IRS standard deductible for business use of a personal vehicle.

The BNA survey finds that:

-- Just over half of the responding companies (52 percent) pay workers 36.5 cents for each mile of business travel in a personal vehicle -- the IRS standard deductible for 2002 -- making that rate the median reimbursement among responding organizations.

-- Mileage reimbursements fall short of the current IRS standard at two-fifths of the surveyed companies; however, most of those firms' rates come within a few cents of the IRS deductible.

-- Only one-tenth of responding employers disregard the IRS standard in setting mileage reimbursement rates. In contrast, nearly three out of five surveyed HR executives (59 percent) reported that their firms' mileage reimbursement rate "is always identical to the IRS standard mileage rate," although quite a few of those respondents (17 percent) reported mileage rates other than the IRS standard at the time of the survey. (Presumably, some employers' rate adjustments lag behind the IRS. Also, some respondents may have misstated or misconstrued their policies or erred in reporting their rates.)

(Further details are contained in the full report.)

BNA's survey of expense reimbursement and business travel policies was conducted in February and March 2002. The survey report is based on responses from 328 human resource and employee relations executives representing a cross section of U.S. employers, both public and private. The report also covers reimbursement for travel meals, lodging, and airport parking; restrictions on business travel arrangements; policies on "frequent flyer" miles earned during business travel; the effect of Sept. 11 on business travel policies; and reimbursement of meal costs incurred during overtime.

BNA is a leading publisher of print and electronic news and information, reporting on developments in business, labor relations, law, health care, economics, taxation, environmental protection, health and safety, and other public policy and regulatory issues.

For more information on the survey results, contact the BNA Survey Research Unit at 202-452-4389. For press copies of the report, contact Karen James-Cody, Media Relations, at 202-452-4169.