How to Calculate and Track Mileage with Drive

When it comes to expense management, accurate mileage calculations are a top priority. Everyone wants to be on the right side of the law, so precise calculations must be part of your business model. You may want to calculate mileage traveled for your employer or for tax purposes. Either way, there are several methods to help you.

Method 1: Standard Rate

The IRS mandates the standard mileage rate every year. This rate is the number used to determine the gas mileage rate for business purposes. This rate already considers operating costs, depreciation, and maintenance. Standard rate is the most commonly used method because it is often the easiest.

Method 2: Actual Expense

This method requires calculating the actual costs of using your vehicle for business needs taking fuel, insurance, maintenance, and depreciation into account. It is, obviously, more complicated than some of the other options because it requires very detailed and manual calculation of each cost item.

Method 3: GPS Apps

Smartphone apps, like Drive, and GPS devices track and calculate mileage using GPS technology. Not only is this an easy method to use, but it’s also accurate. With our Drive app, you can automatically upload to Concur Expense, streamlining the mileage reimbursement process.

Method 4: Good Ol’ Odometer

For many years, mileage was calculated by recording the odometer readings at the start and end of a trip, and then using simple subtraction to calculate the total miles driven. Many still use this manual method. A note of caution, this method is riskier because it’s prone to human error. As simple as it is, it’s not always the most accurate.

Calculating Mileage Reimbursement

The good news is it’s reasonably straightforward to calculate your mileage you’re using the right calculations. If you prefer manual mileage capture, the Drive app can help you there, too. You can easily switch back and forth between the two methods. The steps below can guide you.

Step 1 - Business Mileage Records

The more detailed records you keep, the better able you are to calculate miles traveled and provide proof if required by your employer. You can rack up miles by driving to meetings with clients, running business errands, or making site visits. Any time you must drive to complete some aspect of your job, you should calculate the miles. No matter where you’re traveling, the Drive app supports you. It measures kilometers or miles and can be used around the world.

Step 2 - Know the Reimbursement Rate

The IRS sets the mileage rates each year. Starting January 1, 2025, the rate is 70 cents per mile. That’s the IRS rate, it may not be the rate your company is using. You should always check with your organization to verify their reimbursement rate. While the rate they’re using should be based on the one set by the IRS, there could be a number of reasons why an organization’s rate differs. For example, some organizations may pay less than the IRS rate to save money.

Step 3 - Calculate the Amount

The mileage reimbursement formula is simple:

(total miles for business) x (the reimbursement rate) = amount of reimbursement

Let’s look at an example: Say this year you drove 600 miles for work purposes. The reimbursement rate is 70 cents. 600 x $0.70 = $420.

Step 4 - Other Factors

There could be some other factors that impact the rate you receive. If you use your own vehicle, your reimbursement rate is higher. However, if your business provides a vehicle to you, the rate they allow you to use may be lower. With Drive, you can easily set parameters to help you calculate your miles accurately.

Step 5 - Submit the Report

Your employer likely has a specific type of format for their expense reports. It’s essential that you follow their process and provide all requested information. Details should include all information about the trip, miles driven, and reimbursement amount. You should keep a copy of all records.

Best Practices for Mileage Calculation

When it comes to understanding how to calculate mileage, you want to get it right. You must follow all regulations and procedures. The following tips should help you calculate your mileage accurately.

No matter if you’re tracking your mileage for tax purposes or employee reimbursement, you should:

• Record your mileage accurately and immediately. Don’t rely on memory. Using the Drive app gives you a reliable and useful way to track mileage
• Your records should be detailed and accurate. Include the miles, where you started and stopped, and the date and purpose of the trip.
• Always review your records and verify their accuracy. You want to do your best to catch errors. Use a mileage reimbursement calculator to ensure your numbers are correct.
• When tracking mileage for employee reimbursement, draw a distinct line in the sand between business and personal travel.
• Follow all of your company’s best practices for how to calculate car allowance for employees for proper employee reimbursement.
• For employee reimbursement, use consistent and reliable methods to track and calculate your data.
• Verify mileage with map applications. These tools can give you the distance of specific routes. You can use them to confirm your calculated mileage.

Combining the Drive app with these tips will help you capture and calculate your miles correctly for both reimbursement and tax purposes. Gain more visibility into your mileage expenses by checking out this brochure.