Understanding mileage reimbursement in Pennsylvania is important for both employers managing business expenses and employees using their personal vehicles for work-related travel.
This guide will cover common mileage rates used in Pennsylvania, relevant legal considerations for private employers, and how Fyle can help simplify your mileage tracking and reimbursement.
Pennsylvania Mileage Reimbursement Rate
For private employers operating in Pennsylvania, it's key to know that state law does not mandate a specific mileage reimbursement rate. There is no state-legislated per-mile amount that companies are legally obligated to pay their employees for using personal vehicles for business purposes.
However, a widely adopted practice by many businesses in Pennsylvania is to use the standard mileage rates published annually by the Internal Revenue Service (IRS). This approach is common for several reasons:
- It provides a nationally recognized benchmark that is calculated to reflect the average costs of operating a vehicle for business, including expenses like fuel, maintenance, repairs, 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.
- Using the IRS rate offers a consistent and transparent method for compensating employees fairly for the 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's noteworthy that some state-affiliated entities, like the Pennsylvania State System of Higher Education (PASSHE), have policies to reimburse their employees at the prevailing IRS-approved rate. However, such policies for public employees do not apply to private-sector businesses.
Pennsylvania Mileage Reimbursement Calculator
Need a quick way to estimate your mileage reimbursement? Our Pennsylvania Mileage Reimbursement Calculator is designed to assist you.
Using the Pennsylvania Mileage Reimbursement Calculator is straightforward:
- Choose the tax year for which you want to calculate the reimbursement. Our calculator utilizes the IRS standard mileage rates applicable for that year, as these are a common benchmark in Pennsylvania.
- Input the total business miles driven. The calculator will then provide an estimated reimbursement amount, offering a valuable figure for both employees and employers in Pennsylvania.
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Some Important Pennsylvania Mileage Reimbursement Laws
While Pennsylvania doesn't mandate a specific mileage reimbursement rate for private companies, several labor laws are pertinent:
1. No State-Mandated Rate
Pennsylvania law does not require private employers to reimburse employees for mileage at a specific rate.
2. Pennsylvania Minimum Wage Act & FLSA
This is the most critical 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 Pennsylvania minimum wage.
- Pennsylvania's minimum wage is currently $7.25 per hour, which is the same as the federal minimum wage.
- If an employee incurs driving expenses primarily for the employer's benefit, and these costs (when factored into their weekly earnings and hours worked) reduce their pay to less than $7.25 per hour, the employer could be in violation of the Pennsylvania Minimum Wage Act and the federal Fair Labor Standards Act (FLSA).
3. Adherence to Company Policy/Agreements (Wage Payment and Collection Law)
If an employer establishes a policy or enters into an agreement to reimburse employees for mileage, they are generally required to honor that commitment under Pennsylvania's Wage Payment and Collection Law.
This law ensures employees receive all wages and compensation agreed upon.
4. Record-Keeping
While Pennsylvania law might not prescribe a specific format for mileage logs for private employers, maintaining accurate and contemporaneous records is a best practice and vital for:
- Employers: To substantiate any reimbursement amounts paid and to have records in case of an FLSA wage and hour inquiry.
- Employees: To justify reimbursement requests according to company policy and for personal tax purposes if applicable. IRS guidelines typically require logs to include dates of travel, business purpose, miles driven, and locations.
Pennsylvania Mileage Reimbursement Law vs Federal Law
Understanding the relationship between Pennsylvania's approach and federal law provides further 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).
Pennsylvania State Law:
- Aligns with Federal Minimum Wage: Pennsylvania's minimum wage of $7.25 per hour mirrors the federal rate. Therefore, the FLSA's minimum wage protection regarding unreimbursed expenses directly applies in Pennsylvania without a separate, higher state minimum wage to consider (unlike some other states).
- No Specific Reimbursement Statute: Pennsylvania does not have its own law compelling private employers to reimburse mileage at a specific rate.
- Enforcement of Promised Benefits: Pennsylvania's Wage Payment and Collection Law ensures that employers pay wages and other compensation, which can include promised mileage reimbursements, that have been agreed upon as part of employment.
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 Pennsylvania 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 Pennsylvania, the legal landscape for private employers regarding mileage reimbursement is primarily shaped by federal FLSA minimum wage requirements and the state's Wage Payment and Collection Law concerning agreed-upon compensation, rather than specific state mandates on reimbursement rates.
How Fyle Can Automate Mileage Tracking for Your Pennsylvania Business
Whether your team is navigating Pennsylvania's major cities or covering its extensive rural areas, manual mileage tracking can be inefficient and prone to errors. Fyle offers an intelligent, automated solution to simplify mileage tracking and reimbursement for businesses across the Keystone State.
- Accurate mileage tracking: Ensure every business mile driven in Pennsylvania is precisely captured. Fyle integrates with Google Maps, providing reliable distance calculations for all work-related travel, giving you confidence in your reimbursement data from Erie to Philadelphia.
- Uphold compliance with wage laws: By facilitating accurate mileage logs, Fyle helps Pennsylvania businesses maintain the necessary records to demonstrate that employee earnings comfortably meet or exceed minimum wage requirements ($7.25/hour), even after accounting for vehicle use for company purposes.
- Save time for your Pennsylvania team: Free up your employees from the burden of manual logs and complicated spreadsheets. Fyle’s user-friendly mobile app (available for iOS and Android) allows for effortless mileage tracking on the go. Employees can even submit expenses through familiar tools like Slack or Microsoft Outlook, 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 Pennsylvania business’s policies, ensuring adherence to your Wage Payment and Collection Law obligations if a rate is promised.
- Smooth integration with accounting systems: 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 Pennsylvania operations.
- Keep reimbursements on schedule: Automated approval workflows and timely reminders mean that mileage reports are submitted and processed efficiently, ensuring your Pennsylvania employees receive their agreed-upon reimbursements without unnecessary delays.
Don't let outdated mileage tracking methods slow down your business. See how Fyle can bring new levels of efficiency, accuracy, and ease to your mileage reimbursement procedures.
