How Does the IRS Determine the Standard Mileage Rate?

triplog mobile employee uses standard business mileage rate irs

As most reading this are likely aware, the standard business mileage rate in the United States is a yearly recommendation released by the IRS that is used to help companies determine a fair reimbursement rate for their employees who use their personal vehicles to conduct business on behalf of their place of work. In this short read, we’re going to discuss how the IRS determines this rate and why companies should consider using it.

How the IRS Determines the Standard Business Mileage Rate

Each year, the IRS conducts an independent analysis on the costs of owning and operating a motor vehicle in the United States. According to the IRS, “The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile”.

Related: 2022 IRS Standard Mileage Rate: What To Expect

These “fixed and variable costs” factor in just about anything a car owner can imagine will affect their wallet. Things like fuel prices, costs of maintenance, oil changes, tires, insurance, and just general depreciation are all factors that affect the IRS’ decision each year.

What Goes Into the Standard Business Mileage Rate Determination?

The IRS doesn’t release specific reasons as to why the mileage rate increases or decreases in a given year, other than the fact that it relates to whatever their study claims are the costs of owning and operating a motor vehicle. However, the changes the IRS makes can seem confusing at face value.

For instance, while the price of gas in the United States had decreased between December 2014 and December 2015, the standard mileage rate increased by 1.5 cents. The problem with this is that there are other major factors that go into the costs of owning and operating a vehicle other than gas.

In fact, according to a study conducted by AAA, gas only accounts for about 35% of the yearly costs of owning a vehicle. It turns out, the biggest costs come simply from depreciation, at 39%. The remaining factors make up a smaller percentage.

Once again, we simply don’t know which factors specifically go into the IRS’ determination, but we’re able to make certain reasonable assumptions (costs of gas, insurance, depreciation, etc.). Regardless, it’s up to companies to decide whether the IRS standard business mileage rate is what will work for their specific needs.

Should Your Company Use the IRS Standard Business Mileage Rate?

This is a difficult question as the United States doesn’t have any federal requirements mandating companies to reimburse their employees for mileage and expenses incurred when conducting business in their personal vehicles on behalf of their company. While some states have those specific requirements, most companies in the US have to make a calculated decision as to how much they want to reimburse.

Related: How Much Should You Reimburse For Your Employee’s Mileage?

There are definitely some major positives that come with offering a mileage reimbursement plan to your team. One of the biggest is that it’s a great way to attract (and keep) top-tier talent with your company.

Another big reason is that, while there isn’t a federal mandate, if the expenses that your mobile employees incur while conducting business on behalf of your company cause them to fall below minimum wage, your company will be required to reimburse them at least up to your state’s minimum wage. By using the IRS mileage rate, you can more or less guarantee that your employees will not fall below minimum wage.

Make Your Mileage Reimbursement Process Simple With TripLog

For decades, companies have been forced to require their employees to track their mileage and expenses via inaccurate pen-and-paper methods subjected their companies to fraud (inadvertent or otherwise). 

With more tools than any other single mileage and expense tracker on the market, TripLog gives companies the oversight they want and the peace of mind they deserve. Start saving money, time, and headaches with the industry’s most feature-rich mileage reimbursement solution today. 

Schedule a complimentary demo, or visit our pricing page to get started in minutes. Thanks for reading!

2022 IRS Standard Mileage Rate: What To Expect

irs mileage rate 2022 driver mobile employee

While the 2022 IRS standard business mileage rate hasn’t yet been announced, it’s certainly worth discussing what the rate might be, how it might affect you or your business, and where the IRS standard mileage rate comes from. Using the last few years as precedent, the IRS will likely announce next year’s standard mileage rate in mid-December 2021.

What Does the IRS Standard Mileage Rate Refer To?

The IRS standard mileage rate is a recommended reimbursement rate for companies to their employees who use their personal vehicles to conduct business on behalf of their employer. For example, if a business chooses to use 2021’s mileage rate, they will reimburse their employee 56 cents per mile driven in their personal vehicle for business use.

This figure changes yearly and is based on the fixed and variable costs of owning and operating a motor vehicle. Things like gas, oil changes, vehicle depreciation, and other factors go into the IRS determining the number.

Related: Employee Mileage Reimbursement Guide (2021)

It is important to note that this is an optional rate for companies to offer to their employees. There isn’t a federal requirement or mandate to do so, although some states have their own requirements. Generally, companies that offer mileage reimbursement plans tend to hire and retain higher-quality candidates.

How Will the 2022 Business Mileage Rate Change? 

The standard business mileage rate has gone down steadily since 2019, from 58 to 57.5 in 2020, to 56 in 2021. This is, once again, due to their determination of the fixed and variable costs of owning and operating a motor vehicle.

In order to determine how the business mileage rate will change in 2022, we need to examine trends and the changes to the costs of owning and operating a vehicle through 2021.

How Have Vehicle Costs Changed Throughout 2021?

According to the United States Energy Information Administration, national average gas prices have risen from $2.25 in October 2020 to $3.38 in October 2021. In addition, car insurance costs have also increased in the same time frame.

A report from AAA found that the cost of owning and operating a motor vehicle has been steadily increasing over the past few years, and there’s no reason to assume this trend will diminish in 2022. Maintenance costs have also been increasing over the past few years. 

These particular increases in the cost of owning and operating a car may make one think that the standard business mileage rate will increase, but there are other factors to consider. For instance, while inflation continues to rise in the United States, the rate of inflation has actually been decreasing since 2018, which may be a big contributor to why the standard business mileage rate has decreased in the same time frame.

What Will the 2022 Standard Business Mileage Rate Be?

With that said, given the general increases in the costs of owning and operating a motor vehicle, we at TripLog would assume that businesses should be prepared for a likely increase in the standard business mileage rate. We predict the number won’t go up more than a few cents, given the majority of precedent over the last 10 years, outside of the 3.5 cent increase from 2018 to 2019, though this had been partially due to the effects of the Trump administration’s Tax Cuts and Jobs Act, and a 3.5 cent decrease from 2015 to 2016.

Related: TripLog’s Mileage Reimbursement Guide

Companies should expect the rate to increase from the current rate of 56 cents per mile to around 57 or 58 cents per mile. Even for smaller companies with only a dozen or so mobile employees driving a few thousand miles each year, this can mean an increase of total reimbursement costs by several hundred or even a few thousand dollars. Larger companies with 100+ drivers may pay significantly more.

Be Prepared for an Increase in the Standard Mileage Rate

Using a modern company mileage tracking solution like TripLog is the best way for companies to ensure they’re providing accurate reimbursement to their mobile team members and employees.

To learn more about what TripLog can do for you and your company, please schedule a complimentary demo, or visit our pricing page to get started on your mileage reimbursement journey in minutes. 

Top 5 Must-know Tips for Independent Contractors

best tips for independent contractors self employed uber driver mileage tracking

If you’re willing to eschew the stability and structure that comes with being a stereotypical employee working at a standard 9-5 job, the perks that come with being an independent contractor are no small benefit. Being able to set your own work schedule, pick the clients and jobs that you want, and not being beholden to anyone but yourself can be very appealing to many individuals.

However, there are many distinct challenges that self-employed workers have to face. In this piece, we’re going to look at some of those obstacles and what freelancers and independent contractors can do to conquer them.

1. Set Up a Legal Structure

So you’ve made the choice to become be your own boss. That’s pretty cool! But whether you’re starting your own plumbing company or just driving for Uber as your side hustle, you’re going to want to choose the right type of legal structure.

In the United States, there are many different types of businesses, including corporations, limited liability companies (LLCs), associations, nonprofits, trusts, and sole proprietorships, among others. In general, the two options most closely associated with new independent contractors are sole proprietorships and LLCs.

Being a Sole Proprieter

Compared to starting an LLC, being a sole proprietor requires less paperwork and less upfront spending. You don’t need to file as a business, your taxes will be simpler, and you don’t need to do things like keeping a separate bank account for your business income and expenses. 

Related: 3 Ways SMBs Can Save Money (And 3 Ways They Lose Money)

However, the biggest issue with being a sole proprietor is that you’re personally liable for anything and everything that occurs in regard to your business. For instance, if your business incurs any debts, your personal assets could be seized to pay those debts off. 

Starting an LLC

As it says in the name, if you start a limited liability company, you, the owner, have limited liability in regard to the goings-on of your company, meaning you won’t be personally responsible for things like debts associated with your business. Your taxes may be slightly more complicated to finish, but you may end up saving more money this way in the long run.

On the other hand, if filing paperwork is something that you struggle with or gives you anxiety for whatever reason, starting an LLC may be more difficult than remaining a sole proprietor. In addition, you will very likely be required to have a separate business bank account and may need to keep your business assets and finances separate from your personal ones.

Whichever direction you take, you will need to do your due diligence. Look up your state or jurisdiction’s rules and regulations regarding starting a business as a sole proprietor or an LLC. Keep in mind, this article shouldn’t be taken as legal or tax advice, and you should consult a lawyer or accountant before making any decisions you are unsure of.

2. Create a Business Plan

Okay, you’ve set up your business structure, likely as either a sole proprietor or an LLC. Now it’s time to come up with a robust business plan. In fact, nearly 70% of people who have successfully started a business recommend doing so.

There’s a wealth of literature out there on the internet on great ways to create a business plan, so we won’t go any further here today besides recommending highly that you do so. A simple Google search will point you to countless guides and templates on the best ways to come up with a business plan, and we would suggest picking one that you feel will work for you.

In general, these sorts of guides and templates will have you do things like come up with business objectives, do some light market research, plant the seeds of what your budget may look like, etc. Every business is going to be different, so only do what you feel as though will be beneficial to your business.

3. Get the Tools and Apps You Need

Much of the business landscape in 2021 would be completely unrecognizable and alien to someone a decade or two ago. A lot of this has to do with the fact that each and every one of us has a supercomputer in our pockets that’s capable of doing virtually anything.

With that said, a lot of people still don’t take full advantage of these new tools and devices at their disposal. Many of these apps and software solutions are designed to save business owners time and money. Even if some have an upfront cost, they generally will save you more money, both in the short term, and especially as time goes on.

For example, if you’re an independent contractor who recently started their Uber or DoorDash business, you might think that your delivery app and maps service are all you need to be successful, but that’s not necessarily true. Undoubtedly, you will need to track your mileage and expenses in order to save money come tax time.

Related: Mileage Tracking Apps Vs. Paper Mileage Logging

A robust and sleek mileage tracking app like TripLog is the best way to ensure that you never miss a claimable mile. With features like automatic mileage capture, trip classification, and route planning, TripLog gives the IRS all of the necessary information it needs to provide you with an accurate (and often hefty!) tax refund.

4. Network, Network, Network!

If you’ve heard it once, you’ve heard it a million times, but one of the most important methods to grow your business is to network. Meeting like-minded entrepreneurs is a great way to learn more about your industry and line of work, or even collaborate and work together on your next project. 

You can also see if your line of work has any associations or unions worth joining. For example, drivers working with companies like Uber or DoorDash in the Seattle area can join an organization like Drivers Union to meet other individuals working in your industry, as well as receive certain benefits and protections.

5. Take Advantage of Tax Deductions

As a business owner of any size or type, you are no doubt eligible to deduct certain things on your taxes that you otherwise wouldn’t be if you weren’t running a business. For example, in the United States, if you’re an LLC, you can write off certain purchases that you make when you do your taxes.

If you’re an Uber or DoorDash driver, you can deduct your mileage from your taxes and potentially save hundreds of dollars each year. To learn more about how gig economy drivers can save money come tax time, check out our guide here.

Even if you’re self-employed, you can still deduct certain things from your taxes. It’s important for anyone working for themselves to, at the very least, learn the minimum of tax deduction guidelines, so try and do your own research to see what will be best for your line of work.

TripLog’s mileage tracker app is one of the best tools for independent contractors to save money on their taxes. Download the app for free today on iOS or Android, or schedule a complimentary demo to learn more. Thanks for reading!

Are You an Independent Contractor or an Employee?

independent contractor self employed or employee

Believe it or not, answering the question of whether you are an employee or an independent contractor (i.e. self-employed) isn’t as straightforward as it may seem. While for most people there’s no question, there are some instances where the lines can be blurred. 

Generally speaking, if you sat down for a job interview and got hired by a company, you can probably assume you’re an employee. On the flip side, independent contractors or self-employed individuals (who are often bunched together with gig economy workers (Uber drivers, DoorDash deliverers, etc.)), generally work on their own accord. 

However, things can get confusing when you sat down for the interview, get “hired”, and are still called an independent contractor. In this short piece, we’re going to clear the air on what these two types of workers refer to, what’s different between them, and what it might mean for you and your business.

“Am I an Independent Contractor?”

For a lot of people, the answer to this question is pretty straightforward. Gig economy workers are, overwhelmingly, independent contractors. Uber, Lyft, DoorDash, Grubhub, and everything in between are examples of companies that hire independent contractors to conduct business on their behalf.

Come tax time in the United States, independent contractors will receive a 1099 form from the entity that is paying them, assuming that client paid you a minimum of $600 in that year. Because you are technically self-employed, no taxes are withheld from your income, which means you will very likely be paying more in taxes by the time you file.

Related: 4 Best Tips For Road Warriors

In addition, independent contractors are often required to pay quarterly estimated taxes. The IRS requires this type of payment to be filed by individuals who have sources of income that are not subject to automatic withholding, such as independent contractors.

This can get muddled, however. Sometimes, you may sit down for a traditional job interview and you will be told that you will operate as an independent contractor. One of the biggest reasons why a company would do this is to avoid having to pay benefits, and even potentially avoid most federal employment statutes.

Independent contractors aren’t protected from Title VII employment discrimination requirements, aren’t entitled to benefits from the Family Medical Leave Act, the Fair Labor Standards Act, or the Americans with Disabilities Act, among others.

Independent Contractor Advantages

Self-employed workers get to take advantage of some pretty cool perks. For instance, the apparent dogma of the 9-5 work schedule doesn’t necessarily apply to you, and you’re given complete control over the direction of your work (choice of client, which food order to take, etc.).

Of course, the lack of structure presents some inherent risk compared to the relative safety of being an employee, but independent contractors often welcome these challenges. While not required, gig economy workers will frequently set up as an LLC in order to limit their legal liability and take advantage of certain tax benefits.

Independent Contractor Disadvantages

For the most part, independent contractors aren’t able to take part in company-provided employee benefits. For instance, if you’re an Uber driver, you won’t get to enroll in the company’s healthcare plan, whereas a programmer at Uber’s corporate office would. 

These benefits extend to paid sick leave, vacation days, and retirement plans. As an independent contractor, you are entirely responsible to budget your earnings for these things appropriately. 

Related: What To Do If You Forget To Track Your Miles

In addition, you will need to have detailed records of your income come tax time as your clients (i.e. Uber if you’re an Uber driver) will not withhold federal or state taxes from your earnings. If you’re a road warrior who earns their living in their personal vehicle, tracking your mileage and expenses while working is absolutely imperative, and will save you thousands when it comes time to file your taxes.

“Am I an Employee?”

If you’re using your car to be an Uber driver, you’re self-employed. However, Uber is still a company that hires people to work in their corporate offices, doing jobs like software development, PR, marketing, etc. 

While independent contractors and self-employed individuals are able to set their own hours, an employee’s schedule typically falls under the auspices of the company that they work for. If you get a W2 from the company come tax time, and you’re paid a salary or by the hour, you’re more than likely an employee. 

Whereas independent contractors’ taxes are not withheld by the companies they work with, an employee’s pay stub will show that a portion of their earnings is withheld for taxes for Medicare, Social Security, and state and federal taxes. 

Benefits of Being an Employee

There are two main advantages that working as an employee has over being an independent contractor; namely employee benefits and job security. Despite there not being any federal laws requiring companies to provide the same benefit coverage to all employees, there are some state-level laws, and many companies provide benefits to employees anyway as a way to attract solid talent. 

Related: Mileage Tracking Apps Vs. Paper Mileage Logging

In addition, working at an established company that guarantees pay week-to-week can be a huge perk for a lot of people. The freedom that comes with being an independent contractor also brings a series of risks, a major one of which being the potential for unsteady income. 

Disadvantages of Being an Employee

For many people, the security and benefits of being part of an established business are what they’re looking for, but the freedom that comes with being self-employed is something that may be more enticing for others. Independent contractors have significantly more agency when it comes to who their clients are, how much they want to work, and when they want to do it. 

Whether you’re self-employed or working for a company, if you use your personal vehicle to conduct company business, automatic mileage and expense tracking is an absolute must. TripLog’s automatic mileage tracking app helps save companies and their teams time, money, and stress.

To learn more about how TripLog can support your business, schedule a complimentary live web demo today, or download our app on iPhone or Android. Thanks for reading!

Top 5 Company Mileage Tracker Misconceptions

triplog mileage tracker app misconceptions

Choosing to switch from manual paper-based mileage tracking to a modern mileage tracker app may seem like a no-brainer, but this isn’t necessarily the case. Companies have been tracking their employee’s mileage for decades (check out this fun reimbursement pamphlet from 1960), but up until recently, all mileage tracking had to be done manually. 

With the advent of GPS technology and smartphones, employee mileage tracking and reimbursement have never been easier – or more accurate. Still, companies are often unsure whether it’s worth making the jump from manual mileage logging to a mileage tracker app, often due to a few very common misconceptions. 

In this short piece, we’re going to go through some of these myths and show you why a mileage tracker would be beneficial to your company. 

Company Mileage Tracker Misconception #1: It Must Be Expensive

One of the biggest misconceptions that comes with switching from manual analog solutions to modern digital ones is the idea that it will be more expensive. At first glance, it may appear to be the case, especially when purchasing a yearly subscription to something like TripLog. 

Using TripLog as an example, our yearly plan costs $59.99, which comes to $4.99 per user each month. Without question, this is no simple expense for any business, no matter the size, but there are many hidden factors that come with manual mileage and expense tracking that companies aren’t able to easily notice.

Related: How Much Should You Reimburse For Your Employee’s Mileage?

For instance, according to the Global Business Travel Association, nearly 1/5 of all expense reports have errors. These errors can take up valuable time to correct (18 minutes on average), in addition to being costly when missed. 

In addition, as stated by the Association of Certified Fraud Examiners, companies lose a full 5% of their revenue to fraud, with 10% of that number coming from intentional omissions. Whether you’re a small business or an enterprise-scale corporation, these numbers are huge to a company’s revenue.

Other little things, like the cost of paper, for instance, help contribute to the high costs of manual mileage tracking. Ultimately, solutions like TripLog only serve to save companies money, both in the short term and the long run.

With TripLog’s accurate mileage tracker app and comprehensive web dashboard, companies and their expense and payroll managers are able to get a clear view of their team’s finances as they relate to mileage tracking. In addition, they get numbers that they can trust, given the accuracy of the TripLog app.

Company Mileage Tracker Misconception #2: Paper Logs Are Sufficient

The need for companies to track their mobile employees’ mileage extends long before the advent of smartphones, or even modern computers in general. Given that these companies are still afloat today, it might be easy to assume that paper logs are good enough, but the advantages of a mileage tracker app are numerous.

For example, filling out a manual mileage log takes about two minutes per entry. If a driver is making multiple stops per day, they’re going to be missing out on dozens of hours of productivity every year.

In addition, as we discussed in the previous point (though it bears repeating), manual mileage logs are costing companies thousands of dollars. In a study conducted by TripLog, we found that mileage claims are overreported by as much as 29% when tracked manually. For companies with mobile employees, this can result in thousands of dollars in revenue being lost each year.

Undoubtedly, those are dozens of hours and thousands of dollars that companies are going to want back. While it’s impossible to turn back the clock and fix our mistakes (as far as this writer can tell, anyway), we do have agency over our future, and switching from manual mileage logs to a mileage tracker app is an important way for companies to save money and time. 

Company Mileage Tracker Misconception #3: The App Is More Complicated

Indeed, computer software and apps can be intimidating given how relatively new they are to a lot of people. Business owners especially, who tend to skew older demographically, may be initially uncertain as to whether switching from previous tried-and-true (if flawed) methods to newer ones will be something they will easily understand. 

With TripLog, however, administrators can rest easy knowing their information is easily accessible from one convenient place. From the TripLog dashboard, administrators are able to easily access detailed reports, make policy changes, and manage their mobile team members’ routes and schedules.

Related: Why Small Businesses Are Vulnerable If Not Properly Tracking Mileage

On top of that, TripLog stays up-to-date on all federal and local regulations, cutting out additional time and effort for admins. The TripLog dashboard is highly detailed but easy to pick up quickly for any user, and companies are more than welcome to schedule a free live demo to learn more about it.

Mobile employees get access to the TripLog app, the market’s most full-featured and easy-to-use solution for tracking their mileage, expenses, and schedules. With its sleek interface and automatic mileage tracking features, having TripLog as your company’s mileage tracking method rather than pen-and-paper can be a great way to attract – and keep – high-quality candidates. 

Company Mileage Tracker Misconception #4: Big Brother Must Be Watching

It can certainly be nerve-wracking to be told that you’re being tracked, in any context, and it can be a difficult thing to discuss on either side of the conversation, employer or employee. With TripLog, however, companies and their mobile team members can rest assured knowing that our solutions put privacy first.

While TripLog does offer comprehensive real-time fleet tracking and management solutions, those features are optional, and can be turned off should the company choose to do so. Drivers will also be happy to know that their personal drives and trips are never shared with their company unless they themselves share that information.

Company Mileage Tracker Misconception #5: My Company Is Too Small

Whether you’re a single-user needing to track their mileage to deduct their taxes at the end of the year, a small business with a few home healthcare workers under your wing, or a large multi-national corporation, you only stand to gain by switching from manual logs to a modern mileage tracking app. 

Even one driver manually tracking their mileage can account for dozens of hours of lost productivity and hundreds of dollars in lost revenue each year. TripLog offers a flexible pricing structure that can fit the needs of any sized company or user base.

To learn more about how TripLog can help your company save time and money, schedule a complimentary live web demo today, or visit our pricing page to get started. Thanks for reading!

How Much Should You Reimburse for Your Employee’s Mileage?

triplog mileage reimbursement payroll manager

Of the more than 157 million Americans that are a part of the US workforce, 78.5 million – exactly 50%! – are mobile employees. By 2024, that number is projected to increase to 93.5 million. For many of these companies, their employees are using their personal vehicles to conduct business for the company.

If your company has employees who conduct business using their personal vehicles, mileage reimbursement is an absolute must. The reasons are numerous, but many of them may not be immediately obvious.

The Importance of Mileage Reimbursement

For instance, one of the most subtle benefits of reimbursement is employee happiness. In the United States, there is no federal law or mandate requiring companies to reimburse their employees for their mileage, but having a mileage reimbursement system in place is a great way to give your company credibility, and help attract high-quality and long-lasting candidates to your business.

While there is no federal law requiring mileage reimbursement, companies can be vulnerable to litigation if, for example, a driver’s expenses that they incur while conducting business cause them to fall below the minimum wage. At that point, if the driver provides accurate records that their mileage costs indeed brought their net pay to below the minimum wage, the company is then required, by law, to reimburse them.

What Does “Mileage” Refer To?

According to the IRS, mileage refers to “the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes” (irs.gov). The IRS mileage rate for 2021 is 56 cents per mile, and is calculated by including things like gas, insurance, wear-and-tear on the vehicle.

How Much Should You Reimburse?

Here’s where things get tricky and somewhat vague. Despite there being no federal requirement to reimburse mileage, it’s definitely worth it to the vast majority of businesses to have some sort of reimbursement plan – but what’s the magic reimbursement rate?

The United States is a big country with different costs of living. A reimbursement rate used by a tech company in San Francisco may not make as much sense for a small business in rural Oklahoma. An easy answer would be just to use the standard IRS mileage rate, and many companies choose to do so for convenience.

Related: How Employees Working From Home Deduct Their Mileage

With that said, the IRS rate is little more than a recommendation. In the end, it falls on each respective company to decide what’s fair. Keep in mind, however, that if your rate exceeds the IRS recommendation, that extra income is something that your team will need to pay taxes on.

How to Reimburse

For the vast majority of businesses, mileage reimbursement is something that they should be providing. It keeps your employees happy, attracts high-quality candidates, and ensures that their pay will not fall below the minimum wage.

Related: How To Set Up Mileage Reimbursement For Your Company

The problem, then, is managing the reimbursement process. For decades, companies have had their employees keep track of their mileage using paper-based manual logs. According to TripLog’s internal data, at approximately 2 minutes per entry, drivers lose an average of 58 hours per year filling out mileage logs, which costs companies approximately $2,100 per employee each year.

On top of that, when the drivers pass those logs to their payroll team, it will take another 27 minutes per expense report. When taking into account the fact that 28% of all manual logs are overreported, adding another $1,813 per employee each year, companies are losing an average of $3,913 in operating costs by using manual logs.

Welcome to Modern Mileage Reimbursement.

By switching to a modern mileage tracker app, companies are able to save thousands of dollars and dozens of hours per employee each year. With automatic mileage tracking and expense management built-in, drivers can save time and effort while ensuring they never miss a reimbursable mile.

In addition, the TripLog web dashboard gives companies the oversight and accountability they want, as well as the convenience and stability they need. Having all of your team’s reports in one place is a great way to alleviate the burden that comes with stacks of manual mileage reports or Excel sheets.

To learn more about how TripLog can transform the way your company tracks its mileage reimbursements, schedule a complimentary live web demo today, or see our pricing plans for more details.

Your Drivers May Be Overreporting Their Mileage By 29%. Here’s What You Need To Know.

triplog company mileage reimbursement software

For over a decade, TripLog has helped companies save thousands of dollars and countless hours by streamlining their reimbursement process and cutting down on operational costs. The true costs of manual mileage tracking and reimbursing can often be surprising to companies, especially those not yet adopting modern mileage tracking methods.

According to our internal tracking data, we have discovered that many drivers were inflating their mileage by as much as 30%, potentially costing businesses thousands upon thousands of dollars per year in incorrect and fraudulent reimbursements. Let’s discuss what this means and how companies can use TripLog to protect their financial interests.

triplog ditch manual mileage reimbursement for the best mileage tracker app

The Numbers

Between January 2018 and January 2021, we found that roughly 2.8 million trips were overreported. Of the 52.33 million miles reported among those trips, we found that they were inflated by 27.2% for a total of 14.26 million miles.

When drivers were reporting manually (i.e. not using the app to automatically track their mileage), that number grows to 28.9%. At an average of $0.58 per mile over that period, this would account for roughly $8.2 million in incorrect and fraudulent.

For example, say a driver took a trip and manually reported that it took them 30 miles when in reality it only took 20. The TripLog app compares the route recorded by our automatic mileage tracker or a given manual entry to Google Map’s data.

If Google Maps reports that the drive actually took 20 miles, that can result in overreporting. Thanks to TripLog, those trips were immediately flagged and easily corrected, but companies still using manual reporting and processing methods are far more likely to miss such errors. 

Expense Fraud: More Common Than You Think!

According to the Global Business Travel Association, 19% of all expense reports have errors, and it takes nearly 20 minutes to correct these issues. Even if a company employs just a few drivers, these errors can quickly stack up over just one single pay period in terms of cost in incorrect reimbursements and labor.

In fact, the most common type of expense fraud is mileage reimbursement. Employees that conduct business in their own vehicles often pad their mileage amounts in order to receive additional funding from their employer.

triplog-overreported-mileage-claims

Even prior to the COVID-19 pandemic, expense reporting fraud was on the rise. According to Chrome River’s 2019 Expense Fraud Survey, an average of 5% of employees committed expense reporting fraud that year. Perhaps most important is how these expenses were being submitted.

Employees were most likely to commit expense reporting fraud when – you guessed it! – they were submitting manual or spreadsheet-tracked receipts. Over 9% of employees who submitted expenses this way have committed fraudulent actions in their expense tracking, typically inflating small expenses that were less likely to be noticed.

Switch to a Modern Solution

The true costs of manual mileage and expense tracking should shock business owners, but there are easy-to-implement solutions. For instance, TripLog has made it possible and affordable for firms to get exact mileage reports, put them all into a readable format, and save time for their accounting team, helping stop fraud in its tracks.

To learn more, schedule a complimentary demo with TripLog today, or take a look at our pricing plans. You can also create an account to start your savings journey today, or download the TripLog app on iOS or Android.

4 Best Tips For Road Warriors (2021)

tips for road warriors traveling employees

Working on the road can be as thrilling and invigorating as it can be stressful and exhausting. The unique challenges that road warriors face mean every minute spent on the road needs to be deliberate and well-planned. Here are some tips for road warriors to maximize their efficiency, as well as their sanity.

Invest in Good Equipment

This first tip can be a tricky one to navigate. While the up-front cost of things like secure luggage, good headphones, and high-quality, comfortable clothing can seem daunting, these types of purchases are generally worth it in the long run.

For example, if you’re deciding between a more affordable $400 laptop and a more future-proof $750 laptop, it’s worth considering how long you might keep each respective product. If the $400 laptop is going to be obsolete or running slowly in two years, requiring you to upgrade, and the $750 purchase might last you five years or more, it can be better to invest early and save money in the long run.

The same goes with any sort of equipment road warriors might be using – your cell phone, backpack/bag, even things like a pair of sunglasses or water bottle, all benefit from being high quality. If you’re a sole proprietor, you may even be able to write off many of these purchases on your taxes. Don’t cheap out!

Make the Most of Where You’re Going

No matter where your next job or sale is taking you, there’s a big chance that there will be something you haven’t seen or haven’t tried, especially in regard to major cities. Whether it’s your first time or fiftieth time visiting cities like New York City and Los Angeles, there’s always going to be something new to enjoy.

Even smaller metropolitan areas, like Seattle or Minneapolis, have cultures and experiences worth exploring. If your typical sales routine keeps you closer to home, try and look off the beaten path.

You’re bound to find something in your free time, whether it’s a new museum or a unique bookstore. If your schedule is tight, even going to a highly-rated restaurant that you’ve never been to can elevate any business trip. If your company offers a per diem or reimbursement option, make sure you are tracking your expenses well.

4 best tips for road warriors and traveling workers

Use Modern Tools and Apps

The smartphone might go down as the early 21st century’s most important development. The amount of resources and tools that exist today are staggering – and yet, there are many places where people are slow to adopt change.

For instance, mileage tracking has been done on pen-and-paper for decades, with Excel sheets coming more recently. With the advent of modern mileage tracking apps, those old methods are becoming obsolete.

Manual mileage tracking can be tedious, wildly inaccurate, and cost drivers dozens of hours of their time each year. If you use your personal vehicle when conducting business on the road, tracking your mileage and expenses with an app like TripLog is essential to ensuring you never miss a reimbursable mile or deductible expense.

In addition, accountants and payroll specialists can access detailed reports, and quickly process reimbursements, saving time and cutting down on operational costs. To learn more about what TripLog can do for you and your company, schedule a complimentary demo today!

Take Care of Yourself

Traveling for work, whether it’s taking a day to conduct sales meetings or flying out to another town, can be grueling. Early mornings, late nights, and hectic, non-stop days make even the most rewarding work feel like a chore – but it doesn’t have to be that way. 

For instance, if you feel bad after long flights or car rides, doing some mild exercise (like walking or stretching) before your trip can help with blood circulation, which can, in turn, help you feel better after your trip. In addition to your physical health, it’s important to manage your mental health.

If you often tend to drive several hours between cities or are hop on planes every week, bring some entertainment. Streaming sites like Netflix and Amazon let you download episodes and movies now, making in-flight entertainment a breeze. If you do a lot of driving, do some research on interesting podcasts or audiobooks and download a few of those.

In Conclusion

Undeniably, conducting business on the road can be stressful, but there are many things that road warriors can do to help lighten the load. For instance, switching from manual mileage and expense logs to a modern solution can help save companies and individuals significant amounts of time and money.

If you use your personal vehicle for business travel, or manage teams of people who do so, TripLog will prove to be an invaluable tool. To learn more, schedule a free demo, or simply download the app on iOS or Android.

Employee Mileage Reimbursement Guide (2021)

triplog best company employee mileage reimbursement platform

Even as phone and computer applications grow more and more ubiquitous in our daily lives, there are many places where the old way of doing things still manages to keep hold. One of these places is in the world of employee mileage reimbursements.

In this short read, we’re going to discuss what employee mileage reimbursement entails, what are some current methods that companies use, and how modern offerings can help save those companies time, money, and effort.

What Is Employee Mileage Reimbursement?

Mileage reimbursement refers to employers reimbursing their mobile employees for expenses that they accrue when conducting business using their personal vehicle. This can include fuel costs, but can also be seen as a general cover for wear and tear on the car, as well as long-term needs such as new tires, oil changes, etc.

While there is no federal requirement to provide mileage reimbursement, there are some instances where companies are required to reimburse; namely, certain states require mileage reimbursements, and if the employee will accrue expenses when conducting business that will cause their net pay to fall below minimum wage. The IRS provides a standard mileage rate ($0.56 per mile in 2021) that “is based on an annual study of the fixed and variable costs of operating an automobile” (IRS).

If your company has mobile employees, chances are that you are reimbursing them for their mileage. If they’re using pen-and-paper methods to track their mileage, your company could be missing out on thousands of dollars per year per driver, as well as countless hours in manual payroll processing.

Employee Mileage Reimbursement: The Data

Without a modern mileage tracking app, employees generally use paper mileage logs and Excel spreadsheets. This requires the driver to pull out their mileage logbook, grabbing a pen, and manually entering in the necessary information.

Compared to a modern automatic mileage tracker like TripLog, which automatically starts tracking mileage as soon as the employee begins driving and ends when they’re done, a driver will spend around 2 minutes per mileage entry. If drivers make multiple trips throughout the day, these minutes add up, with a typical driver spending an average of 58 hours a year filling out manual mileage logs.

In addition, TripLog found that, within a three year period, 28% of all manual mileage claims are overreported, costing companies an average of over $1,800 per driver. TripLog’s app cross-references manual reports with Google Maps, ensuring accurate mileage reporting.

triplog ditch manual mileage reimbursement for the best mileage tracker app

Employee Mileage Reimbursement: Make The Switch

TripLog streamlines every step of mileage reimbursement, from reporting to approval. In addition, automatic mileage tracking and reporting cuts down on inaccuracies and inefficiencies.

Drivers can rest easy knowing that they’ll never miss a reimbursable mile, and business owners can be assured that their reimbursements are accurate. Administrators are able to get all of their mileage reports in one convenient web dashboard, ending the need to hunt down stacks of mileage logs or Excel spreadsheets. 

In addition, TripLog’s web dashboard gives business owners and administrators access to insightful data, such as month-by-month mileage, fuel use, busiest hours, and more. 

Employee Mileage Reimbursement: Conclusion

It’s a no-brainer – TripLog saves companies thousands of dollars per driver, saves drivers dozens of hours per year in manual reporting, and can save companies over 10 hours of payroll processing time per pay period. Simply put, switching to a modern mileage tracking and reimbursement solution will save your company money and headaches, as well as improve driver satisfaction.

Trusted by Fortune 100 companies and over 500,000 users, TripLog is the most feature-rich mileage and expense tracking solution available. Download the app on iOS or Android, create an account through our web dashboard, or schedule a free live web demo today!

How Employees Working From Home Deduct Their Mileage

triplog commute to work from home deduct mileage

Prior to the COVID-19 pandemic, only 1/5 of adults in the United States worked from home. That number has since jumped to nearly 3/4, with over 1/2 of them stating they would prefer to continue working from home after the pandemic ends (Pew Research Center). 

With major companies like Google, Facebook, and Amazon permanently overhauling their work-from-home policies, it’s likely that workplace culture is going to take a dramatic shift, one that will last well beyond this current coronavirus outbreak. But if those employees working from home need to travel to a client from their house, how will mileage reimbursement work for them?

Mileage Reimbursement Rules

When an employee drives from their (non-home) office to conduct business, the rules are clear – this is considered deductible mileage according to the IRS. Personal commuting expenses, on the other hand, cannot be deducted, period.

For instance, if you are driving from your house to work in the morning (or vice versa in the evening), you can’t deduct that mileage. Personal commuting expenses also refer to taxis, Ubers, busses, subways, etc. Pre-COVID, even if employees traveled directly from their personal residence to a work-related appointment (a client meeting, plumbing work, etc.), this would be considered a commute, and thus not be reimbursable.

Mileage Reimbursement Working From Home

With that said, the line gets fuzzy when your house is now the location of your office. Let’s say your team has all started working from home with no intention of returning to the old ways of office work and you are told to meet a client on the other side of town.

Would the drive you took to get there count as a commute, as you’re driving from your house to where you are going to work? Or would it count as business, since you’re going from your place of work to go conduct business?

triplog deduct drive from home office to client work meeting

You Can Deduct A Drive From Your House, If…

All that needs to be made clear – and well-documented – is the fact that the employee’s home office counts as an official office location for the company. When that is established, the drive between the home office and, say, a client can thus be deductible.

It would be good to review your state or municipality’s local regulations as well. For example, the State of Washington has very specific requirements on how mileage reimbursement works when employees travel from their home office to conduct business.

At Home Expense Reimbursement

What about expenses other than mileage? Say an employee needs two monitors and was provided such at the office, but their home isn’t as well-equipped for office work. While companies aren’t technically required to reimburse employees for purchases made that will affect their business, there are certain restrictions.

According to the Fair Labor Standards Act, if accrued expenses related to business would cause an employee to earn a net less than minimum wage, the business will need to reimburse them, at least to the point where their net earnings would be at or above minimum wage. If your at home employees earn or are close to the minimum wage, it is your company’s responsibility to reimburse them. 

That includes when they use their personal assets. If they needed to purchase a more expensive Wi-Fi plan or a more ergonomic chair and those purchases could bring your team member down below minimum wage, your company is obligated to reimburse them.

How TripLog Can Help

TripLog’s suite of tools are a powerful way for companies to track their team’s mileage and expense reimbursements. With accurate GPS-based tracking methods and six different autostart options, businesses have been able to streamline their approval process and cut down manual reporting time 10x.

To learn more, schedule a free web demo today, or simply create an account to access our web dashboard, and drivers can download TripLog on iOS or Android.