Company Vehicle Programs Verses Paying IRS Mileage To Employees

As more and more companies develop employee vehicle programs, it is important to understand the liabilities and benefits versus simply paying employee IRS mileage to drive their own personal vehicles, or use company cars. With the increase in the IRS mileage allowance, those companies who currently pay employees the IRS reimbursement rate for business miles are leaving money on the table relative to having a company vehicle program. And this is especially true for those with higher business mile drivers.
As we review the economics, putting drivers who travel more than 12,000 business miles a year in a company provided fuel efficient car or SUV, like a Chevy Impala or a smaller SUV, is a no-brainer relative to paying IRS mileage. But an important factor to consider is what your liability exposure from either method is, in regards to personal or business use of company vehicles. There are some interesting facts that most people may not be aware of when taking these decisions into consideration, and educating oneself on the history of cases and all current federal, state, and local laws is important.

Most businesses focus on the liability the company takes on when adding a company vehicle program. This makes sense, […]

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