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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.

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Mileage Reimbursement Savings Calculator

Using outdated manual mileage logs can cost businesses thousands of dollars per year in lost time and incorrect reimbursements. See how much TripLog can help you save!

Number of drivers

Average miles daily per person​

Number of trips daily

Cents-per-mile

Annual mileage reimbursement costs based on the numbers you provided.

Annual Mileage Reimbursement

50 mi/day x 100 drivers x $0.54 (5 days x 50 wks)

$675,000

This is the inline help tip! You can explain to your users what this section of your web app is about.

According to research, on average employees inflate the mileage by 25% when self reported.

Estimated Reimbursement Savings

25% x Annual Mileage Reimbursement

$168,750

People on average spend 2 minutes on manually recording trips.

Manual Entry Hours

2 mins x 10 trips/day x 100 drivers (5 days x 50 wks)

8,334 hr

Taking national average $25 hourly rate.

Estimated Labor Savings

Avg. $25/hr x Manual Entry Hours

$208,334

Your Company

could save

(Labor Savings + Reimbursement Savings) / Number of Drivers

$4,167

per driver