In Maryland, understanding mileage reimbursement involves looking at federal guidelines, specific state rules for public employees and workers' compensation, and common practices among private employers.
For businesses and employees in Maryland, knowing these rates and rules is crucial for ensuring fair compensation and maintaining compliance.
The most widely recognized standard for business mileage reimbursement is the rate established annually by the Internal Revenue Service (IRS). For the year 2025, the IRS has set the standard mileage rate for business use at 70 cents per mile. This rate was 67 cents per mile in 2024.
While private employers in Maryland are not generally mandated by a specific state law to use the IRS rate for all business-related mileage, many choose this standard because:
- It provides a clear and accepted benchmark for reimbursement.
- Reimbursements made under an accountable plan at or below the IRS rate are typically non-taxable for employees and tax-deductible for employers.
As of January 1, 2025, the key IRS standard mileage rates are:
- 70 cents per mile for business use of a vehicle.
- 21 cents per mile for medical or moving purposes (note: the deduction for moving expenses is currently limited to active-duty members of the U.S. Armed Forces).
- 14 cents per mile driven in service of charitable organizations.
Other relevant rates in Maryland include:
- Maryland State Employee Rate: The State of Maryland, through the Department of Budget and Management, sets the reimbursement rate for state employees using personal vehicles for official business. Effective January 1, 2025, this rate is 70 cents per mile, aligning with the IRS standard business rate. The rate for 2024 was 67 cents per mile.
- Workers' Compensation Medical Travel: The Maryland Workers' Compensation Commission (WCC) sets the mileage reimbursement rate for claimants traveling to and from medical appointments for work-related injuries. For travel on or after January 1, 2024, the rate is 70 cents per mile. Claimants should verify the current rate with the WCC for travel in 2025, as this may be updated.
- U.S. District Court for Maryland Rate: For jurors and others authorized to travel on official court business for the U.S. District Court for Maryland, the mileage rate is 70 cents per mile for travel on or after January 1, 2025.
For historical context, here are the IRS standard business mileage rates from recent years:
Maryland Mileage Reimbursement Calculator
Simplify your mileage reimbursement calculations with our user-friendly Maryland Mileage Reimbursement Calculator.
How to Use the Calculator:
- Select the correct tax year: Choose the year for which you're calculating reimbursement (e.g., 2025, 2024), as the applicable IRS rates can change.
- Input your business miles: Enter the total number of miles driven for business purposes using your personal vehicle.
- Calculate your reimbursement: The calculator will automatically apply the official IRS standard mileage rate for the selected year and display your estimated reimbursement amount.
This tool provides a quick and accurate estimate, beneficial for both employees needing to claim expenses and employers processing those claims.
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Some Important Maryland Mileage Reimbursement Laws
While Maryland doesn't have a statewide law mandating mileage reimbursement for all private-sector employees in every instance, several state laws and federal regulations influence how employers should handle these expenses:
1. Maryland Wage and Hour Law
Maryland's minimum wage is $15.00 per hour for all employers, effective January 1, 2024.
A critical point is that any unreimbursed business expenses an employee is required to incur, such as mileage for using a personal vehicle for work, should not cause their effective hourly earnings to fall below this state minimum wage threshold.
If it does, the employer could be in violation of Maryland's wage laws. Tipped employees must earn at least $3.63 per hour in direct wages, which, combined with tips, must meet the $15.00 minimum wage.
2. Workers' Compensation
Maryland law ensures that employees injured on the job receive reimbursement for necessary travel to obtain medical treatment. The mileage rate for this is set by the Workers' Compensation Commission (70 cents per mile for 2025).
3. No General Mandate for Private Employers
Maryland law does not specifically obligate private employers to offer mileage reimbursement for general business use of personal vehicles.
Therefore, a company's internal policy plays a significant role. However, many employers choose to reimburse as a good business practice and to avoid potential minimum wage complications.
4. State Employee Travel Regulations
Maryland has specific regulations and rates for the reimbursement of its state employees for travel expenses, including mileage, which is set at 70 cents per mile for 2025.
Maryland Mileage Reimbursement Law vs. Federal Law
Understanding the interplay between Maryland's state context and federal laws is essential for proper mileage reimbursement:
Federal Law (FLSA)
The Fair Labor Standards Act (FLSA) is the primary federal law affecting this area. It mandates that employees receive at least the federal minimum wage ($7.25 per hour) "free and clear" of any business expenses incurred primarily for the employer's benefit.
If a Maryland employee's unreimbursed mileage costs effectively reduce their pay below this federal threshold, the employer must provide sufficient reimbursement to meet the minimum wage.
However, since Maryland's minimum wage ($15.00 per hour) is significantly higher, compliance with the state minimum usually ensures compliance with the federal minimum in this regard.
Maryland State Law
- Maryland's Wage and Hour Law establishes a minimum wage of $15.00 per hour for all employers.
- Specific provisions mandate mileage reimbursement for travel related to workers' compensation medical treatment.
- The travel reimbursement rate for state employees aligns with the IRS standard rate for 2025.
IRS Regulations
The IRS sets the standard mileage rates (e.g., 70 cents/mile for business in 2025) for tax purposes.
These rates are not legal mandates for employers to reimburse but are crucial for determining the non-taxable amount of reimbursement under an accountable plan.
Using these rates helps ensure that reimbursements aren't considered taxable income for employees and are deductible for employers.
In Maryland, the state minimum wage law provides a robust wage floor. State law specifically addresses workers' compensation travel and sets a clear rate for public employee travel. IRS guidelines offer a practical framework for the amount and tax treatment of reimbursements, commonly adopted by Maryland employers.
How Fyle can automate mileage tracking
Take the hassle out of mileage reimbursement. Fyle offers Maryland businesses a streamlined, automated platform to manage travel expenses with precision and ease.
- Accurate GPS mileage logs: Automatically captures travel distances via Google Maps for reliable records.
- Smart rate management: Easily configure IRS, state-specific, or custom rates that apply instantly to claims.
- Effortless commute distinction: Defines home/work locations to correctly deduct non-reimbursable daily travel.
- Automated recurring claims: Allows one-time setup for frequent routes, simplifying future claim submissions.
- Built-in policy controls: Embed company travel rules to proactively flag non-compliant expenses.
- Seamless accounting sync: Connects with QuickBooks, Xero, NetSuite, and more for smooth data transfer.
- Fast ACH reimbursements (US only): Enables quick and direct payment for approved employee mileage.
With Fyle, Maryland companies can boost efficiency, ensure compliance, and simplify the entire mileage tracking process.
