For 2025, Pennsylvania businesses can follow the IRS standard mileage reimbursement rate of $0.70 per mile. As an employer, you maintain full flexibility to set your reimbursement amount at this rate or adjust it according to your needs. Just keep in mind that reimbursements exceeding the IRS benchmark will trigger tax consequences for your employees.

The table below offers a comprehensive view of IRS standard mileage rates over time.

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 Pennsylvania, 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.

In Pennsylvania, grasping the subtle complexities of mileage reimbursement regulations helps you maintain compliance with state Minimum Wage Law while fostering a positive workplace culture.

Pennsylvania law gives private employers considerable latitude regarding mileage reimbursement policies. Although the state imposes no universal requirement to reimburse employees for business travel, understanding the guidelines outlined below will help you develop appropriate mileage reimbursement strategies for your organization.

Board of governors' policy 1986-07-A for state employees

Pennsylvania's governance of state employee travel expenses falls under the Board of Governors' Policy 1986-07-A, which has been in effect since October 1986 with its most recent update in April 1998. This policy emphasizes cost effectiveness for all travel expenditures including mileage.

State employees who use their personal vehicles for official business receive reimbursement at a rate established by the chancellor. This compensation is designed to cover the comprehensive costs of vehicle operation including fuel consumption, insurance premiums and regular maintenance.

The policy makes clear that while the mileage rate encompasses most vehicle related expenses, employees can submit separate reimbursement requests for parking fees and toll charges incurred during business travel.

Pennsylvania minimum wage act and mileage reimbursement

The Pennsylvania Minimum Wage Act serves as a cornerstone for fair employee compensation practices. While this legislation does not specifically require mileage reimbursement, it becomes relevant when evaluating how travel expenses affect overall worker pay.

Under this law, you must ensure that any job related costs absorbed by employees, including business mileage, do not reduce their effective earnings below the state minimum wage of $7.25 per hour.

This creates an important consideration for employers. If your staff members incur necessary travel expenses without reimbursement and these costs effectively push their compensation below the minimum wage threshold, you may unintentionally breach wage regulations. This makes it prudent to factor travel expenses into your overall compensation structure to maintain compliance and demonstrate commitment to equitable treatment.

Establishing clear and effective mileage reimbursement practices benefits both employers and employees throughout Pennsylvania. Whether you're operating in urban centers like Philadelphia and Pittsburgh, or rural communities, these practical guidelines will help your business remain compliant, fair, and efficient.

Clearly define eligible mileage

Employee mileage reimbursement policies should state explicitly what constitutes reimbursable mileage, such as client meetings, inter-office travel, and deliveries. Companies need to communicate which travel activities don't qualify for reimbursement, with daily commuting between home and office being the most common example. Setting clear boundaries helps prevent misunderstandings and ensures employees know when they can submit an expense claim for their travel.

Utilize the IRS mileage rate as a benchmark

Adopting the IRS standard rate ($0.70 per mile in 2025) simplifies your expense reimbursement process and minimizes confusion among employees. This approach also streamlines your accounting procedures since the IRS rate is widely recognized and accepted. If your company chooses a different reimbursement rate, clearly explain your reasoning to employees and communicate any potential tax implications they should be aware of when submitting their expense reports.

Implement simple, consistent mileage tracking

Provide employees with standardized mileage logs or recommend easy-to-use mileage tracking apps to streamline the expense reporting process. Consistent documentation helps ensure accuracy and creates a clear record for both internal accounting and potential tax purposes. Regularly reviewing submitted mileage claims helps maintain compliance with your policies and prevents common reporting errors that can complicate the reimbursement process.

Address toll and parking reimbursements explicitly

Pennsylvania employers, especially those near urban areas and toll routes such as the Pennsylvania Turnpike, should clearly define if tolls and parking expenses are included in their expense policies. Your guidelines should specify exactly how employees must document these expenses, whether through receipts, E-ZPass statements, or parking slips, to facilitate efficient processing of their expense claims. This clarity is particularly important for businesses with employees who frequently travel through toll areas.

Educate employees and managers on mileage policies

Hold periodic training sessions or include employee mileage reimbursement procedures in your company's onboarding process to ensure everyone understands the expectations. Creating accessible resources like handbooks, FAQs, or video explainers helps employees navigate common reimbursement questions and learn proper documentation practices. Well-informed employees submit more accurate expense claims, reducing the administrative burden of correcting errors and reprocessing submissions.

Ensure compliance with the Pennsylvania minimum wage act

Regularly review your reimbursement policy to ensure employee expenses don't inadvertently lower compensation below Pennsylvania's minimum wage of $7.25 per hour. This is particularly important for lower-wage workers whose unreimbursed business expenses could potentially push their effective hourly rate below the legal minimum. Conducting periodic audits of employee pay and expenses confirms ongoing compliance and demonstrates your commitment to fair compensation practices.

Establishing effective Pennsylvania mileage reimbursement practices requires balancing legal compliance with employee satisfaction. While state law grants private employers significant discretion regarding travel policies, understanding both the federal IRS standards and the Pennsylvania Minimum Wage Act provides essential context for developing reimbursement strategies that work for your organization.

Creating a transparent and fair mileage reimbursement process benefits both your business and your employees. Such policies not only help maintain compliance with wage regulations but also demonstrate your commitment to fairly compensating staff for expenses incurred while performing their duties, ultimately contributing to higher workplace morale and employee retention.

Brex expense management software simplifies this entire process through comprehensive automation. The platform streamlines expense reimbursement workflows, automates approval processes, captures receipts instantly, and enforces your spending policies without manual intervention. By integrating corporate cards, expense management, bill pay, business banking, and travel booking into a single unified platform, Brex eliminates the administrative burden traditionally associated with expense management. Sign up for Brex today to transform how your business handles mileage reimbursement and all other financial operations.