If you’re an employer in the United States, it’s likely that you pay your employees mileage reimbursement when they’re traveling for work purposes. Every year, the IRS adjusts the mileage reimbursement rate based on examination of variable costs. Based on the latest study, the IRS has changed 2021’s mileage rate to a lower rate than last year. Taxpayers will use this rate to compute their deductible costs associated with using a vehicle.
If you’ve ever been involved with any business travel, you may have heard of the term “per diem”. It’s a type of reimbursement that employers give employees when they’re traveling for work purposes. Since per diem payments are a simple way to compensate employees for traveling, most employers hop on board.