Understanding mileage reimbursement is important for both employers and employees in Missouri when personal vehicles are used for business-related travel.
This guide will cover common mileage rates used in Missouri, relevant legal considerations for private employers, and how Fyle can simplify your mileage tracking and reimbursement processes.
Missouri Mileage Reimbursement Rate
For private employers in Missouri, it's essential to know that state law does not mandate a specific mileage reimbursement rate. There isn't a legislated per-mile amount that companies are legally obligated to pay employees for using their personal vehicles for work purposes.
Despite this, many businesses throughout Missouri choose to use the standard mileage rates published annually by the Internal Revenue Service (IRS) as a reliable benchmark. This is a widely adopted practice for several key reasons:
- It provides a nationally recognized standard calculated to reflect the average costs associated with operating a vehicle for business, including fuel, maintenance, insurance, and depreciation.
- Reimbursements made at or below the current IRS standard business rate are generally non-taxable income for the employee, provided that proper and accurate records are maintained.
- It offers a consistent and transparent method for compensating employees fairly for the business use of their personal vehicles.
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.
For historical context, here are the IRS standard business mileage rates from recent years:
It is important to note that the State of Missouri sets its own mileage reimbursement rates for state government employees through the Office of Administration.
This rate often aligns with the IRS standard rate (e.g., likely $0.70 per mile for 2025 once officially adopted for state employees). However, these rules and rates for state employees do not apply to private-sector businesses.
Missouri Mileage Reimbursement Calculator
Need to quickly estimate your mileage reimbursement? Our Mileage Reimbursement Calculator can assist you.
Using the Mileage Reimbursement Calculator is straightforward:
- Choose the tax year for which you want to calculate the reimbursement. Our calculator uses the IRS standard mileage rates applicable for that year, as these are a common benchmark in Missouri.
- Input the total business miles driven. The calculator will then provide an estimated reimbursement amount, offering a helpful figure for both employees and employers in Missouri.
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Some Important Missouri Mileage Reimbursement Laws
While Missouri doesn't set a specific mileage reimbursement rate for private companies, certain labor laws are important to consider:
1. No State-Mandated Rate
Missouri law does not require private employers to reimburse employees for mileage at a specific rate.
2. Missouri Minimum Wage & FLSA
This is the most crucial legal consideration. Employers must ensure that any unreimbursed business-related expenses, such as mileage for work-related travel in an employee's personal vehicle, do not cause an employee's effective hourly wage to fall below the Missouri minimum wage.
- Missouri's minimum wage is adjusted annually. As of January 1, 2025, it is $13.75 per hour.
- If an employee incurs driving expenses that are primarily for the benefit of the employer, and these costs (when factored into their weekly earnings and hours worked) reduce their pay to less than the applicable Missouri minimum wage, the employer could be in violation of state wage laws and the federal Fair Labor Standards Act (FLSA).
3. Adherence to Company Policy/Agreements:
If an employer establishes a policy or enters into an agreement to reimburse employees for mileage, they are generally expected to honor that commitment. Missouri's wage payment laws (RSMo Chapter 290) require employers to pay all compensation due to employees according to the terms of employment.
4. Record-Keeping
While Missouri law might not prescribe a specific format for mileage logs for private employers, maintaining accurate and contemporaneous records is a best practice and essential for:
- Employers: To substantiate any reimbursement amounts paid and to have records in case of a wage and hour inquiry related to minimum wage.
- Employees: To justify reimbursement requests according to company policy and for personal tax purposes if applicable. IRS guidelines generally require logs to include dates of travel, business purpose, miles driven, and locations.
Missouri Mileage Reimbursement Law vs Federal Law
Understanding the relationship between Missouri's approach and federal law provides additional clarity:
Federal Law (FLSA)
- The FLSA does not explicitly mandate mileage reimbursement by private employers.
- Its primary role in this context is ensuring that unreimbursed work-related expenses do not illegally reduce an employee's wages below the federal minimum wage ($7.25 per hour).
Missouri State Law
- No Specific Reimbursement Statute: Missouri, similar to federal law, does not have its own law compelling private employers to reimburse mileage at a specific rate.
- Higher State Minimum Wage Protection: Missouri's minimum wage (projected $13.75/hour for 2025) is significantly higher than the federal minimum wage. This means the threshold at which unreimbursed expenses could become problematic is higher in Missouri, offering greater protection to ensure employees' actual earnings meet this state standard.
- Enforcement of Promised Benefits: Missouri law does require employers to pay wages and other compensation that has been promised to employees.
IRS Guidelines
- These are federal tax guidelines, not laws that force private employers to reimburse.
- They define the rate at which mileage reimbursements are generally non-taxable to employees. This is why many Missouri employers, like those nationally, use the IRS rates (e.g., 70 cents per mile for business in 2025) as a standard for their reimbursement policies.
In Missouri, the legal landscape for private employers concerning mileage reimbursement is primarily shaped by the state's own minimum wage laws (which exceed federal levels), rather than specific state mandates on reimbursement rates.
However, any promises made regarding reimbursement should be upheld.
How Fyle Can Automate Mileage Tracking for Your Missouri Business
Manual mileage tracking can be a drain on time and prone to errors. Fyle offers an intelligent, automated solution to simplify mileage tracking and reimbursement for businesses throughout Missouri.
- Accurate mileage tracking: Fyle integrates with Google Maps, providing accurate distance capture for all work-related travel, giving you confidence in your reimbursement data whether you're navigating urban centers or rural routes.
- Uphold compliance with wage laws: By facilitating accurate mileage logs, Fyle helps Missouri businesses maintain the necessary records to demonstrate that employee earnings comfortably meet or exceed the state's minimum wage requirements, even after accounting for vehicle use for company purposes.
- Save employee time: Free up your employees from the hassle of manual logs and complicated spreadsheets. Fyle’s user-friendly mobile app allows for effortless mileage tracking on the go. Employees can even submit expenses through familiar tools like Slack or Gmail, streamlining the entire process.
- Flexible for your business needs: If your company chooses to set a specific reimbursement rate—be it the IRS standard or a custom rate—Fyle offers the customization to adapt to your Missouri business’s policies.
- Robust accounting integrations: Fyle connects with popular accounting software such as QuickBooks, Xero, Sage, and NetSuite. This ensures that mileage expense data flows directly and accurately into your financial systems, simplifying reconciliation for your operations.
- Reimbursements on time: Automated approval workflows and timely reminders mean that mileage reports are submitted and processed efficiently, ensuring your employees receive their reimbursements without unnecessary delays.
Don't let outdated mileage tracking methods slow down your Missouri business. See how Fyle can bring new levels of efficiency, accuracy, and ease to your mileage reimbursement procedures.
