California Mileage Reimbursement

California sets strict labor laws, ensuring that employees are reimbursed for any expenses they incur while on duty. 

One of these expenses is using one’s personal vehicle for business-related purposes.

California law that stipulates mileage reimbursement

The law states that “an employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful.”

In accordance with labor laws, mileage reimbursement is mandatory in California—employers must pay for it to be compliant.

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Mileage reimbursement in California

There are a few different methods by which employers can reimburse employees for their mileage in California:

• Lump-sum payments
• A cents per business mile rate
• Actual expenses reimbursement
• A mix of the above

Learn more about the types of employee mileage reimbursement.

Mileage reimbursement in California is meant to cover all costs of owning and operating a personal vehicle for the business portion of its use. These costs include depreciation, insurance, road tax, leasing payments if any, depreciation, fuel and maintenance and more.

Employers will generally require that employees provide records and/or receipts of their business mileage expenses in order to receive reimbursement.

California mileage rate 2025

One of the most common mileage reimbursement programs is the cents per business mile rate, due to its administrative simplicity. Employees are reimbursed at a flat rate per mile and receive the payout each month. In most cases, the mileage reimbursement is not taxed, as it is not considered a benefit.

The IRS sets standard mileage rates each year. Employers are not required to provide the official rate - they can choose to pay out a lower or higher rate per mile. If you are reimbursed at a rate higher than the official, the excess will be taxed as income.

California mileage rate 2025

The 2025 IRS mileage rate for business miles is 70 cents per mile.

California mileage rate 2024 & 2023

The 2024 standard IRS mileage rate for business miles is 67 cents per mile. The mileage rate in 2023 was $0.655 per mile.

Looking for the 2022 rates? See the 2022 IRS mileage rate.

Mileage record requirements

Depending on the method by which employees are reimbursed, employers may require different records. Some common records will include the miles an employee has driven for business purposes and the date and destination of each trip. If your employer reimburses mileage by the actual expenses method, they will also ask for receipts for car expenses. You will still need to record your mileage in order to work out the business use percentage of the vehicle. Learn more about the IRS mileage log requirements.

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