California's labor laws mandate that employees be reimbursed for any expenses they incur while on duty, including using their personal vehicles for business-related activities. This guide offers a look at California's mileage reimbursement laws, how to calculate reimbursements, and how to ensure compliance with all relevant regulations.
California's labor laws explicitly require that employers reimburse employees for expenses incurred during their work duties. This includes using their personal vehicles for business purposes. The law states: “An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful.”
Thus, employers must provide mileage reimbursement to remain compliant with state law. The Everlance mileage tracking app helps employees log their business travel and calculate reimbursements automatically, staying up-to-date on California's regulations and mileage rates.
This law mandates that employers indemnify employees for all necessary expenses or losses incurred during the discharge of their duties. The section explicitly covers business-related vehicle use, which is at the core of mileage reimbursement.
You can find the text of this law directly from California Legislative Information - Labor Code Section 2802(a)
California's laws stand out for their strict enforcement and comprehensive coverage:
One of the more common reimbursement methods is using the current IRS mileage rate. The IRS has set the 2024 standard mileage rate for business miles at 67 cents per mile. Employers can choose to pay a higher or lower rate than the IRS standard. However, if the rate exceeds the IRS rate, the difference is considered taxable income.
California employers can choose from several methods to reimburse employees for business-related travel:
Mileage reimbursement in California aims to cover all costs associated with owning and operating a personal vehicle for business purposes. This includes depreciation, insurance, road taxes, leasing payments, fuel, maintenance, and more.
Depending on the reimbursement method, employees may need to provide different records:
The Everlance mileage tracking app simplifies the recording process, ensuring accurate logs and helping employees meet IRS requirements.
How much is mileage reimbursement in California?
California follows the IRS standard mileage rates, with the 2024 rate set at 67 cents per mile. Employers can choose to reimburse at a higher or lower rate, though any excess over the IRS rate is taxable.
How do you calculate mileage reimbursement in California?
To calculate reimbursement, multiply the miles driven for business purposes by the applicable mileage rate. For example, driving 100 miles at the 2024 rate of 67 cents per mile yields a reimbursement of $67. Alternatively, if using the actual expenses method, keep records of all relevant expenses and calculate the business use percentage.
California's strict labor laws ensure employees are reimbursed for business-related travel expenses. Employers can choose from various reimbursement methods, but they must adhere to these laws to avoid penalties. The Everlance app simplifies tracking and calculating reimbursements, helping both employers and employees stay compliant.