Caregiver mileage reimbursement, done right

Federal law doesn't mandate mileage reimbursement in most cases, but several states do require reimbursing necessary business expenses, and unreimbursed driving can effectively push hourly caregivers below minimum wage — a real wage-and-hour risk. Practically, agencies that reimburse fairly keep caregivers; driving costs are a leading quiet reason caregivers quit.

Drives between clients during the workday, and driving that is itself part of the service (errands, transporting a client per the care plan). The ordinary commute — home to the first client and last client to home — is generally not reimbursable. Write the policy down and apply it consistently.

Not if it's paid under an accountable plan: a business purpose, substantiated miles (who, when, where, how far), reimbursement at or below the IRS standard mileage rate, and paid as its own line — never folded into gross wages. Blow any of those and it becomes taxable wages for the caregiver and payroll tax for you. Confirm specifics with your accountant.

Most agencies use the IRS standard mileage rate as the ceiling and reference point; some pay slightly less. Paying above the IRS rate makes the excess taxable. Whatever you choose, publish it to your caregivers and keep it consistent.

Because they're reconstructed from memory at the end of a pay period — miles get rounded up, drives get forgotten, and the office can't verify either direction. GPS capture at the time of the drive ends the argument in both directions: caregivers stop losing forgotten miles, agencies stop paying estimated ones.

Capture at drive time (GPS or immediate manual entry with odometer), review and approve per caregiver, value at your published rate, pay by pay period as a separate reimbursement line, and keep the substantiation attached to each trip. That's both the IRS-clean structure and the dispute-free one.