In Montana, navigating mileage reimbursement involves understanding federal guidelines, specific state rules for public employees and workers' compensation, and common practices among private employers.
For businesses and employees in Montana, 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 Montana 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 Montana include:
- Montana State and Local Government Employee Rate: Montana Code Annotated (MCA) 2-18-503 provides that the mileage rate for state and local government employees using personal vehicles for official business is set by the Department of Administration. This rate typically aligns with the IRS standard business rate. Therefore, for 2025, the rate is 70 cents per mile (it was 67 cents per mile in 2024). The Montana Operations Manual for state employee travel also reflects this policy.
- Workers' Compensation Medical Travel: Montana law requires employers to reimburse injured employees for reasonable travel expenses incurred to obtain necessary medical services for work-related injuries. The mileage reimbursement rate for this purpose is the same as the rate allowed for state employees, meaning it is 70 cents per mile for 2025 (and was 67 cents per mile in 2024).
For historical context, here are the IRS standard business mileage rates from recent years:
Montana Mileage Reimbursement Calculator
Simplify your mileage reimbursement calculations with our user-friendly Montana 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.
Calculate
Results
Some Important Montana Mileage Reimbursement Laws
While Montana 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. Montana Minimum Wage Law
Montana's minimum wage is $10.55 per hour as of January 1, 2025. 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 Montana's wage laws.
Quick note: Businesses not covered by FLSA with gross annual sales of $110,000 or less may have a different rate, but FLSA-covered employees must receive the higher state or federal minimum.
2. Workers' Compensation (Montana Code Annotated Title 39, Chapter 71)
Montana law ensures that employees injured on the job receive reimbursement for necessary travel to obtain medical treatment.
The mileage rate for this is tied to the state employee travel reimbursement rate, which aligns with the IRS standard business rate (70 cents per mile for 2025).
3. No General Mandate for Private Employers
Montana 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. Public Employee Travel Regulations (MCA 2-18-503 & MOM Policy)
Montana has specific statutes and policies governing how public officers and state/local government employees are reimbursed for travel expenses, including mileage.
These mandate that the state mileage rate align with the IRS standard rate, ensuring public employees are reimbursed at a nationally recognized level.
Montana Mileage Reimbursement Law vs. Federal Law
Understanding the interplay between Montana'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 Montana 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 Montana's minimum wage is significantly higher, compliance with the state minimum usually ensures compliance with the federal minimum in this regard.
Montana State Law
- Montana's Minimum Wage Law establishes a rate higher than the federal standard, with annual adjustments.
- Specific provisions mandate mileage reimbursement for travel related to workers' compensation medical treatment, aligning with the IRS rate.
- The travel reimbursement rate for state and local government employees also aligns with the IRS standard rate.
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 Montana, the state minimum wage law provides a robust wage floor. State law aligns both workers' compensation and public employee travel reimbursement with the IRS standard rates. IRS guidelines offer a practical framework for the amount and tax treatment of reimbursements, commonly adopted by Montana employers.
How Fyle can automate mileage tracking
Streamline your mileage reimbursement and leave manual logs behind.
Fyle provides Montana businesses with a smart, automated system for managing travel expenses accurately and effortlessly.
- GPS-based distance logging: Automatically records travel mileage with Google Maps precision.
- Flexible rate application: Supports IRS, state-specific, or custom rates, applied instantly to claims.
- Simple commute deduction: Defines home/work locations to easily exclude non-reimbursable travel.
- Automated recurring claims: Allows one-time setup for frequent routes, generating future claims automatically.
- Upfront policy compliance: Embed your company's travel rules to catch out-of-policy submissions early.
- Direct accounting integration: Syncs seamlessly with QuickBooks, Xero, NetSuite, and other accounting software.
- Quick ACH payments (US only): Facilitates fast, direct reimbursement for approved mileage expenses.
With Fyle, Montana companies can boost efficiency, ensure compliance, and simplify the entire mileage tracking process.
