The Internal Revenue Service (IRS) recently raised the standard-mileage-reimbursement rate for the final six months of 2008. As a result, the vast majority of employers will follow suit by reimbursing their employees at this rate, right? Not necessarily, according to the results of a recent Compensation.BLR.com poll.
When asked "Does your company use the IRS's standard mileage rate to reimburse employees?," 64 percent responded "We reimburse at the IRS's standard mileage rate" while 35 percent responded "We reimburse employees at a lower rate than the IRS's." Just one percent responded "We reimburse at a higher rate than the IRS's."
The IRS normally updates the mileage rates once a year in the fall for the next calendar year, but rising gas prices prompted action said IRS Commissioner Doug Shulman: "Given the increase in prices, the IRS is adjusting the standard mileage rates to better reflect the real cost of operating an automobile, We want the reimbursement rate to be fair to taxpayers."
The rate will increase to 58.5 cents a mile for all business miles driven from July 1, 2008, through December 31, 2008. This is an increase of 8 cents from the 50.5-cent rate in effect for the first six months of 2008.
The Compensation.BLR.com poll included 309 respondents.