Mileage Allowance

Mileage Allowance is a corporate travel policy that compensates employees for using their personal vehicles for business purposes. Instead of reimbursing actual fuel or maintenance costs, companies provide a fixed rate per mile or kilometer, often based on government or company-specific guidelines.

This allowance ensures that employees are fairly compensated for travel expenses while keeping expense tracking simple. It typically covers costs like fuel, wear and tear, insurance, and vehicle depreciation, making it a cost-effective alternative to rental cars or company vehicles.

Many organizations set mileage reimbursement rates according to government regulations (e.g., IRS rates in the U.S.) or negotiate corporate mileage policies to optimize costs and compliance.