In North Dakota, where travel is often essential for business across its diverse economy, understanding mileage reimbursement is a key financial consideration.
The state's approach for public sector and workers' compensation travel directly mirrors federal IRS standards, providing a clear benchmark that many private employers in North Dakota also find practical to adopt.
The nationally recognized standard for these travel expense calculations is the rate published annually by the Internal Revenue Service (IRS). For the year 2025, the IRS has set this standard mileage rate for the business use of a personal vehicle at 70 cents per mile. This is an increase from the 67 cents per mile rate that was effective for 2024.
While North Dakota law does not specifically mandate that all private employers must use this IRS rate for general business travel, aligning with this federal standard is a common practice for several reasons:
- It offers a straightforward, consistent, and widely understood basis for reimbursement calculations.
- Payments made through an accountable plan at or below the IRS rate are generally not considered taxable income for the employee and are deductible as a business expense for the employer.
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 North Dakota include:
- North Dakota State Employee Rate: State of North Dakota employees who use their personal vehicles for official state duties are reimbursed at the standard mileage rate allowed by the IRS, as per N.D. Admin. Code § 92-01-02-03. Therefore, for 2025, this rate is 70 cents per mile.
- Workers' Compensation Medical Travel: Injured employees in North Dakota are entitled to reimbursement for necessary travel to obtain medical services for work-related injuries (N.D.C.C. § 65-05-28). The mileage rate for this purpose is the same as the rate allowed for state employees, meaning it is 70 cents per mile for 2025.
For historical context, here are the IRS standard business mileage rates from recent years:
North Dakota Mileage Reimbursement Calculator
Easily determine your potential mileage reimbursement with our North Dakota Mileage Reimbursement Calculator.
How to Use the Calculator:
- Select the correct tax year: Choose the year for your calculation (e.g., 2025, 2024), as IRS rates are updated annually.
- Input your business miles: Enter the total miles driven for business purposes using your personal vehicle.
- Calculate your reimbursement: The calculator will apply the official IRS standard mileage rate for the chosen year to display your estimated reimbursement amount.
This tool provides a straightforward estimate based on federal standards, useful for managing travel expenses in North Dakota.
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Some Important North Dakota Mileage Reimbursement Laws
While North Dakota does not have a specific statute requiring all private employers to reimburse business mileage at a set rate, various state laws and federal regulations are pertinent:
1. North Dakota Minimum Wage Law (N.D.C.C. Chapter 34-06)
North Dakota's minimum wage is $7.25 per hour, aligning with the federal rate.
A key consideration for employers is that any unreimbursed business expenses an employee is required to incur, such as mileage, should not cause their effective hourly earnings to fall below this minimum wage.
Tipped employees must be paid a cash wage of at least $4.86 per hour, with tips ensuring they reach the full minimum wage.
2. Workers' Compensation (N.D.C.C. § 65-05-28)
State law mandates that employers furnish and pay for reasonable medical services for work-related injuries, which includes reimbursement for necessary travel.
The mileage rate for this travel is linked to the state employee rate, which is the IRS standard rate (70 cents per mile for 2025).
3. Absence of General Private Employer Reimbursement Mandate on Rate
Beyond ensuring minimum wage compliance and fulfilling workers' compensation obligations, North Dakota law does not generally compel private employers to reimburse for mileage at a specific rate. Thus, company policy often dictates these practices.
4. State Employee Travel Regulations (N.D.C.C. § 54-06-09; N.D. Admin. Code § 92-01-02)
North Dakota has clear statutes and administrative rules governing how state employees are reimbursed for travel expenses, explicitly tying the mileage rate to the IRS standard. This establishes a strong precedent for fair reimbursement within the state's public sector.
North Dakota Mileage Reimbursement Law vs. Federal Law
In North Dakota, the legal and practical framework for mileage reimbursement is strongly influenced by federal standards, especially since the state's minimum wage and official travel rates directly align with federal figures.
Fair Labor Standards Act (FLSA)
The FLSA is the cornerstone federal law that establishes the national minimum wage, currently $7.25 per hour.
A critical principle of the FLSA is that an employee’s wages must not be effectively reduced below this federal minimum by unreimbursed business expenses that primarily benefit the employer, such as the cost of operating a personal vehicle for work.
If such expenses were to decrease an employee's net pay below this federal floor for the hours worked, the employer would be responsible for providing sufficient reimbursement to cover the difference.
North Dakota's State Laws
North Dakota's own legal provisions interact closely with these federal requirements:
- The state's minimum wage is also set at $7.25 per hour (N.D.C.C. § 34-06-03). This direct alignment means that ensuring compliance with North Dakota's minimum wage regarding unreimbursed expenses simultaneously satisfies the FLSA's requirements in this context.
- North Dakota law explicitly ties its state employee mileage reimbursement rate (N.D. Admin. Code § 92-01-02-03) and, consequently, its workers' compensation medical travel rate to the current IRS standard rate. This demonstrates a comprehensive state-level adoption of the federal benchmark for official and mandated travel reimbursements.
IRS Regulations
The standard mileage rates published by the Internal Revenue Service (e.g., 70 cents per mile for business in 2025) are primarily established for federal income tax purposes. These are not laws that legally require all employers to reimburse at that specific figure.
However, their practical importance is very significant. When a North Dakota employer uses an accountable plan and reimburses at or below these IRS rates, the reimbursement is typically not considered taxable income for the employee and is a deductible expense for the business.
The state's decision to align its own official rates with the IRS further underscores the utility and widespread acceptance of this standard within North Dakota.
In summary, for North Dakota employers, the state and federal minimum wage laws provide an identical wage floor that must be protected from being diminished by unreimbursed business expenses.
Furthermore, North Dakota's practice of aligning its public sector and workers' compensation mileage rates directly with the IRS standard solidifies these federal figures as the predominant benchmark for reasonable and tax-efficient reimbursement practices across the state.
How Fyle can automate mileage tracking
Navigate mileage reimbursement in North Dakota with ease using a business mileage tracker like Fyle. Our platform simplifies mileage and expense management for businesses, enhancing accuracy and saving valuable time.
- Precise GPS-based mileage logs: Automatically records travel distances using Google Maps, ensuring dependable and accurate data for every journey.
- Smart rate application for North Dakota: Configures IRS standards, North Dakota's state-aligned rates, or your unique company figures, applying them instantly to claims.
- Clear management of commute travel: Helps easily define home and work locations to accurately deduct non-reimbursable personal commute mileage for fair calculations.
- Automated claims for repetitive routes: Enables employees with regular travel to set up routes once, streamlining future mileage submissions and reducing manual input.
- Built-in policy checks for compliance: Embeds your company's specific expense guidelines to proactively flag any claims that deviate from established rules or spending limits.
- Seamless integration with accounting software: Connects directly with popular systems like QuickBooks, Xero, Sage, and NetSuite, ensuring smooth data transfer and minimizing manual reconciliation.
- Efficient ACH payments for quick reimbursement (US only): Offers fast and direct deposit for approved employee mileage claims, improving the payment cycle.
Fyle empowers North Dakota businesses to manage mileage expenses with modern efficiency, fostering compliance and providing a better experience for their teams.
