For employers electing to provide mileage reimbursement when employees utilize personal vehicles for business purposes, the standard IRS business mileage rate offers a straightforward solution. The 2025 rate stands at $0.70 per mile—a figure established as the benchmark for appropriate compensation.

The following data presents the current IRS mileage reimbursement rates alongside a comparative analysis of year-to-year adjustments:

Note: Organizations have flexibility to reimburse employees at rates that differ from the IRS standard. However, any reimbursement exceeding the IRS rate will be classified as taxable income to the employee.

To calculate applicable mileage reimbursement for Ohio, do the following:

1. Select the appropriate tax year for your calculation period
2. Enter the total miles driven to compute eligible reimbursement amounts

The calculator below provides precise reimbursement figures based on current rates and specified mileage inputs.

While Ohio law establishes no mandate for mileage reimbursement in the private sector, comprehending the regulatory structure remains valuable for strategic decision-making.

For managers overseeing state employees, specific regulatory constraints apply. Rule 123:6-1-03 of the Ohio Administrative Code establishes clear parameters for mileage reimbursement. The rule permits compensation only when using personal vehicles proves more economical than state-owned alternatives. Furthermore, reimbursement is appropriate only in the absence of reasonable transportation options.

These provisions serve dual purposes, promoting fiscal responsibility while ensuring rational allocation of state resources. The framework creates a principled approach to expense management in public employment contexts.

Private employer considerations for mileage reimbursement

Private employers operate under distinctly different parameters regarding mileage compensation.

Ohio's minimum wage regulations require private employers to provide mileage reimbursement when failure to do so would reduce employee earnings below the state minimum wage threshold. Under these circumstances, adopting the IRS recommended rate of 67 cents per mile for 2024 represents a prudent financial strategy.

This approach delivers multiple advantages for private organizations. It ensures equitable compensation for employees utilizing personal vehicles for business purposes. Such policies simultaneously enhance company reputation by demonstrating tangible commitment to employee welfare. Additionally, this practice maintains compliance with Ohio's minimum wage provisions, creating a financially sound framework for addressing transportation expenses.

Federal guidelines vs Ohio mileage reimbursement laws

At the federal level, the IRS establishes a standard mileage rate each year that serves as guidance rather than a requirement for private employers throughout Ohio.

The mandatory reimbursement threshold activates only when failing to compensate would reduce employee earnings below Ohio's minimum wage floor. This regulatory framework simultaneously safeguards worker compensation while affording employers considerable latitude in developing mileage policies tailored to their specific business needs.

Thorough knowledge of these nuanced aspects of Ohio mileage reimbursement regulations enables employers to structure policies that enhance organizational attractiveness. Such informed approaches contribute significantly to creating workplace environments characterized by fairness and competitive compensation practices.

Even though employee mileage reimbursement seems straightforward, Ohio businesses frequently make common mistakes that can lead to compliance issues, tax problems, and employee dissatisfaction. Understanding and proactively avoiding these pitfalls can greatly benefit your organization.

Mistake 1: Not updating reimbursement policies annually

Many Ohio employers neglect to update mileage reimbursement rates when the IRS announces annual changes. This oversight creates confusion among employees and can result in significant underpayments over time. As seen in the rate table, the IRS standard mileage rate increased from $0.655 in 2023 to $0.67 in 2024, and now stands at $0.70 for 2025. Companies operating with outdated rates not only risk employee dissatisfaction but may inadvertently create minimum wage compliance issues when reimbursements fail to cover actual expenses.

How to fix it

Schedule a policy review at the beginning of each year, typically in January when the IRS announces new standard rates. Assign responsibility to a specific team member within your HR or finance department to monitor these changes. Once updated, communicate the new rates clearly to all affected employees through multiple channels, including email announcements, updated handbook policies, and department meetings. Create a dedicated section on your company intranet where employees can always access the current reimbursement rate.

Mistake 2: Misclassifying mileage as non-taxable income

A troublesome tax error occurs when Ohio employers reimburse employees above the IRS standard rate without properly treating the excess as taxable income. This misclassification can trigger IRS audits and penalties. For instance, a company reimbursing at $0.75 per mile in 2025 must treat the $0.05 difference above the $0.70 IRS rate as taxable wages subject to income and employment taxes.

How to fix it

Develop a clear accounting approach that separates reimbursements into two distinct categories. The portion up to the IRS standard rate should be processed as non-taxable expense reimbursement, while any amount exceeding this threshold must be classified as taxable compensation. Ensure your payroll software accurately captures this distinction on employee wage statements and tax forms. Consider consulting with a tax professional to review your current practices and implement appropriate adjustments to your accounting procedures.

Mistake 3: Poor or inconsistent mileage tracking

Failing to establish robust mileage tracking protocols creates a breeding ground for inaccuracies and disputes. Without proper documentation, employers face challenges verifying legitimate business travel, potentially leading to overpayments or underpayments. In more serious cases, inadequate tracking can expose Ohio businesses to wage violation claims if employees can demonstrate that unreimbursed expenses effectively reduced their earnings below minimum wage standards.

How to fix it

Establish clear mileage tracking guidelines that balance accuracy with ease of use. Consider investing in modern mileage tracking applications that use GPS technology to automatically log business trips while addressing privacy concerns. For companies preferring traditional methods, create standardized, user-friendly mileage logs that prompt employees to record essential information including dates, starting locations, destinations, business purposes, and total mileage. Provide regular training on proper documentation practices and implement a consistent verification process for submitted mileage claims.

Mistake 4: Neglecting employee training and communication

Perhaps the most preventable mistake involves insufficient communication about mileage policies. When employees lack clarity on expense reimbursement eligibility, submission deadlines, or documentation requirements, the result is frustration, compliance gaps, and administrative inefficiency. This communication breakdown often leads to inconsistent application of policies across departments and locations.

How to fix it

Develop a thorough communication plan around your mileage reimbursement program. Incorporate detailed explanations of mileage policies during new employee onboarding, emphasizing eligibility criteria and submission procedures. Create accessible reference materials including process flowcharts and FAQs to address common questions. Schedule periodic refresher sessions, particularly after expense policy updates or when compliance issues arise. Encourage managers to reinforce proper procedures with their teams and establish a dedicated contact person who can address employee questions about the reimbursement process.

sectors. State employees must receive reimbursement according to specific provisions in the administrative code, while private employers have much more flexibility in handling travel expenses.

Smart businesses recognize that mileage reimbursement policies do more than just satisfy regulations. When private companies adopt the IRS standard rate, they protect themselves from potential minimum wage issues while also building employee loyalty. Fair travel reimbursement practices send a powerful message about company values and can significantly improve workplace satisfaction.

Brex expense management software transforms this complex terrain into a streamlined process for Ohio businesses. The platform automates the entire expense management workflow from reimbursement calculations to approval routing, while integrating intelligent receipt capture technology. Users benefit from automated policy enforcement that maintains spending guardrails without manual intervention. Notably, Brex unifies traditionally fragmented financial functions by bringing corporate cards, expenses, reimbursements, bill payment, travel booking, and startup banking onto a single intuitive platform, eliminating administrative redundancy.

Sign up for Brex today and transform how you handle your mileage reimbursement and broader expense management.