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Post by anneinwa on Jun 29, 2017 0:34:52 GMT
We are self-employed with one employee. He raised a fuss today asking to start being reimbursed for mileage on jobs that are farther away, like the one he is working on now.
What do we need to consider before implanting or not implementing this? Below are just some ramblings because maybe there is something I am not thinking about. I do plan on contacting my tax accountant once we have thought through this more.
Currently, this job is 19 miles away from home base...aka the shop. Currently if he needs to come here first and pick up tools, his clock-in time starts when he gets the tools and then continues to the job site. Same if he needs to pick up materials at a store. In this case he would not be paid mileage on top of hourly pay.
The job he starts tomorrow is 6 miles from his house, 7 from the shop. He has said that is close enough, no reimbursement needed.
I am troubled with him asking for 19 miles one way (23 miles from his house). Is this a fair request?
If we were to set something up I am thinking the best way would be based on a radius, would mileage be paid for anything beyond that radius, or for the full amount? Let's say we set up a 15 mile radius from the shop, would he be reimbursed the full 19, or just the additional 4 each way?
Anything else to consider? Not too worried about what might be needed to retain the employee, but want to make sure we think this through and cover all the bases before making a decision.
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Post by busy on Jun 29, 2017 0:39:59 GMT
It’s fairly standard for employers to reimburse mileage that is above and beyond the normal commute. So whatever he has to drive beyond the mileage between his home and your shop would be reimbursed. AND that’s paid time. I don’t think there are any laws that require you to reimburse mileage, but states most definitely do have laws about when travel time is and is not required to be paid. Be sure you are familiar with the specifics around that for your state.
ETA an example: If I had to attend a meeting that was 40 miles round-trip from my home, and my normal commute between my home and office was 10 miles round-trip, I would be reimbursed 30 miles. That’s if I started from home and did not go to my regular office location at all. If I had to go to my regular office and then proceed to the meeting, I would be reimbursed the actual mileage from the office, to the meeting, and back.
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Deleted
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May 8, 2024 13:13:14 GMT
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Post by Deleted on Jun 29, 2017 0:42:26 GMT
I think his commute is to your shop, any and all miles he drives after coming to the shop should be reimbursed. There is a rate set by the IRS, you can use that, most employers do, although it is not mandatory to do so.
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pridemom
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Post by pridemom on Jun 29, 2017 0:44:39 GMT
His request is more than fair and is expected when driving your own vehicle. My office's policy is that if you are going somewhere besides your main assigned office, you get paid mileage above your typical drive to work. For instance, if you drive six miles to work usually, but have to drive ten to somewhere at the start of the day, you get reimbursed for four miles. If you then go to the office, you get reimbursed for the distance between the two. If I start my day at a location closer than my six mile drive, I do not get reimbursed. Make sense?
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61redhead
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Post by 61redhead on Jun 29, 2017 0:44:44 GMT
I am not a business owner, but IMHO an employee should be allowed mileage if he has to use his personal vehicle and gas to travel to job sites away from the home site. If he were an independent contractor then it would be on him. Was this addressed at all in his employment contract? The current IRS rate is $0.535 per mile.
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Post by anneinwa on Jun 29, 2017 0:57:15 GMT
It’s fairly standard for employers to reimburse mileage that is above and beyond the normal commute. So whatever he has to drive beyond the mileage between his home and your shop would be reimbursed. AND that’s paid time. I don’t think there are any laws that require you to reimburse mileage, but states most definitely do have laws about when travel time is and is not required to be paid. Be sure you are familiar with the specifics around that for your state. ETA an example: If I had to attend a meeting that was 40 miles round-trip from my home, and my normal commute between my home and office was 10 miles round-trip, I would be reimbursed 30 miles. That’s if I started from home and did not go to my regular office location at all. If I had to go to my regular office and then proceed to the meeting, I would be reimbursed the actual mileage from the office, to the meeting, and back. I get the mileage, and that does make sense, I just need to accept that because it is not uncommon to have to drive 30 miles here to reach a job. Are you saying that 19 miles (regardless of it being from the shop or a fraction of his drive from home) would be paid time as well? Also, if the job is 23 miles from his home, 19 miles from the shop, and the shop is 13 miles from his home, we would reimburse for 6 miles each way if he drove from home? |
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Post by anneinwa on Jun 29, 2017 0:58:02 GMT
I am not a business owner, but IMHO an employee should be allowed mileage if he has to use his personal vehicle and gas to travel to job sites away from the home site. If he were an independent contractor then it would be on him. Was this addressed at all in his employment contract? The current IRS rate is $0.535 per mile. Employee contract was basic when we hired him. He is the first employee we have had so we are learning. |
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Post by anneinwa on Jun 29, 2017 1:00:52 GMT
His request is more than fair and is expected when driving your own vehicle. My office's policy is that if you are going somewhere besides your main assigned office, you get paid mileage above your typical drive to work. For instance, if you drive six miles to work usually, but have to drive ten to somewhere at the start of the day, you get reimbursed for four miles. If you then go to the office, you get reimbursed for the distance between the two. If I start my day at a location closer than my six mile drive, I do not get reimbursed. Make sense? Ok so I asked this also on another reply. If he has to drive to the job 23 miles from his house (not stopping by the shop), we would pay mileage only on the difference between if he were driving to the shop and on vs straight there? The shop is 13 miles from his house, and the job site is another 19 from the shop. |
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Post by littlemama on Jun 29, 2017 1:08:42 GMT
Why is he using his own car? Is the travel an occasional thing or is it a regular part of his job?
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Post by Darcy Collins on Jun 29, 2017 1:10:02 GMT
Big or small, every company I've ever worked for reimbursed for mileage. It's always been the mileage from the office to the location, irregardless of whether you came to the office first or ever - your expectation when you took the job and bought/rented your house was that you would commute that distance. On the extremely rare occasion, I actually had meeting closer to my home than my office, the company still reimbursed based on distance from office. Now this is an office setting with client meetings - you mention tools - I'm not actually sure how common mileage reimbursement is for contractor type jobs. You might need to be sure you're getting advice from people in the trades - my dad sure as heck didn't get reimbursed for mileage no matter where a particular construction job was- but he was union and not working for an individual.
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61redhead
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Post by 61redhead on Jun 29, 2017 1:11:05 GMT
I am not a business owner, but IMHO an employee should be allowed mileage if he has to use his personal vehicle and gas to travel to job sites away from the home site. If he were an independent contractor then it would be on him. Was this addressed at all in his employment contract? The current IRS rate is $0.535 per mile. Employee contract was basic when we hired him. He is the first employee we have had so we are learning. Also, if the job is 23 miles from his home, 19 miles from the shop, and the shop is 13 miles from his home, we would reimburse for 6 miles each way if he drove from home? This is how it was done at my previous job, with the intent being that if you were not driving to a remote location, you would be driving to work any way. So the mileage allowance was always calculated from our plant site to the remote location. |
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Post by anneinwa on Jun 29, 2017 1:12:39 GMT
Why is he using his own car? Is the travel an occasional thing or is it a regular part of his job? We don't have enough capital to provide a work vehicle yet. It is construction and he mostly works at the job site (which can vary day to day/week to week depending on length of job. Ideally we try to get all the tools up to the site he would need but occasionally he needs to swing by the shop to pick something up. |
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Post by anneinwa on Jun 29, 2017 1:14:58 GMT
Employee contract was basic when we hired him. He is the first employee we have had so we are learning. Also, if the job is 23 miles from his home, 19 miles from the shop, and the shop is 13 miles from his home, we would reimburse for 6 miles each way if he drove from home? This is how it was done at my previous job, with the intent being that if you were not driving to a remote location, you would be driving to work any way. So the mileage allowance was always calculated from our plant site to the remote location. Thank you. Honestly not trying to cheat him out of money/reimbursement if he is entitled to it, just trying to make sure we can pay bills/ourselves at the end of the month and small expenses add up. 6 miles vs 19 one way would be almost $140 every pay period. |
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Post by anneinwa on Jun 29, 2017 1:17:26 GMT
Big or small, every company I've ever worked for reimbursed for mileage. It's always been the mileage from the office to the location, irregardless of whether you came to the office first or ever - your expectation when you took the job and bought/rented your house was that you would commute that distance. On the extremely rare occasion, I actually had meeting closer to my home than my office, the company still reimbursed based on distance from office. Now this is an office setting with client meetings - you mention tools - I'm not actually sure how common mileage reimbursement is for contractor type jobs. You might need to be sure you're getting advice from people in the trades - my dad sure as heck didn't get reimbursed for mileage no matter where a particular construction job was- but he was union and not working for an individual. Yes it is construction, and he knew our job radius when he was hired. I actually see the point in what everyone is saying and it is starting to cement the policy we will probably implement. There are other issues that might go hand in hand with this but we will address them as they come up and they are more pertinent to ask someone in the trade. |
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Post by Bitchy Rich on Jun 29, 2017 1:20:26 GMT
This is how it was done at my previous job, with the intent being that if you were not driving to a remote location, you would be driving to work any way. So the mileage allowance was always calculated from our plant site to the remote location. Thank you. Honestly not trying to cheat him out of money/reimbursement if he is entitled to it, just trying to make sure we can pay bills/ourselves at the end of the month and small expenses add up. 6 miles vs 19 one way would be almost $140 every pay period. If $140 per period is significant to you, imagine how he feels. Would you want to pay that out of pocket to get the job done for your employer? Hence, raising the fuss. |
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IAmUnoriginal
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Post by IAmUnoriginal on Jun 29, 2017 1:20:33 GMT
Yes, mileage would be calculated from where he left for the job site. If he leaves from home and goes directly to the site, mileage starts when he gets in his vehicle. If he comes to the office first, mileage starts from the office when he leaves for the job site. He should also be paid mileage when he's using his personal vehicle to run between the job site and stores for supplies.
You should be able to find a mileage log form or booklet for him to use. When my DH turns in mileage, he lists the beginning mileage on his car at the beginning of his trip, the ending mileage, does the math to calculate the mileage and brief notes for each entry. "123 Main St, Anytown, met with mr. smith" or "123 That Ave, Anytown, Target for supplies for safety meeting" etc. He turns in his mileage log once a month and is reimbursed with his first paycheck of the month. It's a separate line item on his check and is not taxed as it is reimbursement, not income.
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Post by littlemama on Jun 29, 2017 1:21:38 GMT
Legally, you do not have to pay him mileage.
Legally, you do not have to pay the IRS amount.
That being said, you are asking him to use his own gas and put miles and wear and tear on his personal vehicle. The right thing to do would be to pay him mileage above the miles he would drive to the shop. So, if his normal drive is 13 miles, and the trip from home to job site is 19 miles, you would pay him mileage on the 6 miles.
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Post by Darcy Collins on Jun 29, 2017 1:29:31 GMT
As it's construction and these are temporary work sites, you fall into completely different rules. You absolutely need to consult with your accountant to be sure that you don't end up with a mess by reimbursing him for expenses that aren't deductible. Depending on whether your "shop" constitutes an actual work site, or whether he's only working on client sites matter. If he basically has no primary work sites, mileage is only deductible if it's out of his metropolitan area. If you end up reimbursing him for mileage outside the IRS guidelines, you will need to include it on his W2 as wages. Tread very carefully here!
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Dani-Mani
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Post by Dani-Mani on Jun 29, 2017 1:34:04 GMT
I work for one of the largest school districts in the nation and they are (strongly) considering no longer reimbursing us for mileage. So I don't think it's as big of a deal as he makes it; and I'm in an itinerant employee who travels a LOT for the district. But that's just my experience.
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Post by anneinwa on Jun 29, 2017 1:34:07 GMT
Thank you. Honestly not trying to cheat him out of money/reimbursement if he is entitled to it, just trying to make sure we can pay bills/ourselves at the end of the month and small expenses add up. 6 miles vs 19 one way would be almost $140 every pay period. If $140 per period is significant to you, imagine how he feels. Would you want to pay that out of pocket to get the job done for your employer? Hence, raising the fuss. That was just comparison based on the real numbers however... he has daily totals of 48, 60, and 76 written on his time sheets as I do payroll right now... for the same job location, and there was no requested material run from us. I am not sure where these numbers are coming from and I haven't asked him yet. Based on google maps it would be 46 from his house round trip. 38 from the shop. I honestly don't mind being fair, but in comparison when my husband commuted 30 miles one way, we couldn't ask for mileage because it was to the "office." That is why I am trying to figure out how to fairly compute it. I want honestly and fairness to go both ways, that's why I am asking. |
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Post by anneinwa on Jun 29, 2017 1:37:24 GMT
As it's construction and these are temporary work sites, you fall into completely different rules. You absolutely need to consult with your accountant to be sure that you don't end up with a mess by reimbursing him for expenses that aren't deductible. Depending on whether your "shop" constitutes an actual work site, or whether he's only working on client sites matter. If he basically has no primary work sites, mileage is only deductible if it's out of his metropolitan area. If you end up reimbursing him for mileage outside the IRS guidelines, you will need to include it on his W2 as wages. Tread very carefully here! Thank you! One reason I wanted to see what others thought and then talk to my accountant. This job was borderline, but I wasn't sure if we would need to reimburse for the full distance or something outside a radius... I am ok with him asking but want to make sure we don't cause ourselves more issues too. |
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Post by anneinwa on Jun 29, 2017 1:41:59 GMT
Legally, you do not have to pay him mileage. Legally, you do not have to pay the IRS amount. That being said, you are asking him to use his own gas and put miles and wear and tear on his personal vehicle. The right thing to do would be to pay him mileage above the miles he would drive to the shop. So, if his normal drive is 13 miles, and the trip from home to job site is 19 miles, you would pay him mileage on the 6 miles. Thank you, that is kind of where I am leaning after reading everything and will talk to a tax person too. |
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freebird
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Post by freebird on Jun 29, 2017 1:42:48 GMT
I would me more apt to just give him a stipend of like $100/mo and that's it. He can insist that you pay it or quit, and then he's out of a job. There's probably a compromise in there somewhere.
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pridemom
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Post by pridemom on Jun 29, 2017 1:44:43 GMT
His request is more than fair and is expected when driving your own vehicle. My office's policy is that if you are going somewhere besides your main assigned office, you get paid mileage above your typical drive to work. For instance, if you drive six miles to work usually, but have to drive ten to somewhere at the start of the day, you get reimbursed for four miles. If you then go to the office, you get reimbursed for the distance between the two. If I start my day at a location closer than my six mile drive, I do not get reimbursed. Make sense? Ok so I asked this also on another reply. If he has to drive to the job 23 miles from his house (not stopping by the shop), we would pay mileage only on the difference between if he were driving to the shop and on vs straight there? The shop is 13 miles from his house, and the job site is another 19 from the shop. If he drives 13 miles to work, but the shop is 23 mikes, he would be paid mileage for ten miles. |
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Post by walkerdill on Jun 29, 2017 1:49:35 GMT
I live 5 miles from my work. Sometimes there are meetings 1 1/2 hrs away. I am reimbursed mileage from my work to the meeting & back to work. Not the 5 miles per way to my job. I am also paid hourly from my job & back to my job NOT to my home. I'm pretty sure that's common practice.
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Post by chaosisapony on Jun 29, 2017 2:41:58 GMT
I get $25/day every day I have to work in our out of town office that is a 50 mile one way commute. It's common practice to give a mileage reimbursement when you have an employee that has to drive around to job sites. Is he using his own vehicle or a company vehicle?
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Post by anneinwa on Jun 29, 2017 3:40:10 GMT
I get $25/day every day I have to work in our out of town office that is a 50 mile one way commute. It's common practice to give a mileage reimbursement when you have an employee that has to drive around to job sites. Is he using his own vehicle or a company vehicle? It is his own since we are a small company that can't afford a work vehicle. All jobs are within decent distance or shorter of what a normal commute here would be and what he knew areas we worked in when he was hired. So far it's only this one job he has had trouble with. I think some research I need to do is he is only really at the 'office' once a week. The rest of the time is on the job site which changes week to week. Might need to call some of the companies around here and see what is normal. |
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Post by scraphollie27 on Jun 29, 2017 4:59:05 GMT
We own a plumbing company and recently had to hire an employee before we had time to add another vehicle to the fleet. We don't have a "home base" so we paid his mileage whilst he was driving around during the day but not to the first job of the day (as long it was within 10km of his home) or home from the last job. He had to keep a log (and he needs that for tax purposes) and we paid .55/km which is prescribed maximum rate for tax purposes (I'm in Canada). Anything over that rate can be construed as earnings and therefore taxable.
In fairness, the guys driving our fleet vehicles are getting the better deal (they drive them to and from home) because they aren't putting wear and tear on their own vehicles, don't have to maintain business use insurance on their own vehicles and are using our gas to get to and from home.
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seaexplore
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Post by seaexplore on Jun 29, 2017 5:21:36 GMT
I'm a teacher. When we have to go to other sites, we are paid the miles from our home site to the meeting site. IF we return to our home site, we are paid that as well. If we do not go back to our home site (must check in with the principal or secretary) then we only get paid TO the meeting, not both ways. It doesn't matter if the site is closer to home or farther than my home school.
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snyder
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Post by snyder on Jun 29, 2017 5:35:49 GMT
If you reimburse, he can't claim on taxes. If you don't reimburse, he can claim on his taxes, but only if he itemizes.
Another thing that needs to be clear is his vehicle insurance. The IRS reimbursement amount takes into consideration the gas, wear and tear and any additional he may have to pay to his insurance because he is using his vehicle for company business. It has to be clear, who would be responsible if he were to get in an accident to and from a work site.
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