mileage reimbursement while in us?

How do companies handle mileage reimbursement to canadian employees traveling in the US. Do they still expense at the .485/K rate even though the price of gas is less in the US right now? What is fair to the employer and the employee?

1 Answer

  • 1 decade ago
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    According to the U.S. Internal Revenue Service, employers may reimburse their employees up to US$0.485 per mile for business-related travel. Any reimbursements up to this amount are not subject to income tax. Reimbursements in excess of this rate are generally subject to income tax.

    The rate is determined each year. The IRS examines the cost of using a car each year. A substantial amount also includes the cost of gasoline. If the IRS determines that gas prices were less in 2007 than in 2006, they will probably decrease the rate for 2008.

    Naturally, some cars are more expensive to operate than other cars. Nevertheless, using the same government-approved rate for all employees, regardless of what car they drive, is a fair basis for reimbursement.

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