A vehicle reimbursement provided by employers typically covers the costs associated with business use of a personal vehicle. This reimbursement can take several forms, from a fixed monthly stipend to a per-mile rate. For example, a company might offer $500 per month or $0.58 per mile driven for business purposes.
Offering financial support for vehicle use can be a significant benefit for both employers and employees. It can incentivize employees who need to use their personal vehicles for work, reducing recruitment challenges and improving employee satisfaction. Historically, vehicle allowances were more common for sales roles or field service positions. However, with the rise of remote work and hybrid work models, these reimbursements are increasingly relevant for a wider range of employees. This practice can also help organizations manage their own fleet costs and liabilities.
