The Internal Revenue Service just announced a midyear increase in the standard mileage rate to 55.5 cents per mile. The new rate takes effect on July 1, 2011. It applies to all business miles driven from July 1, 2011, to December 31, 2011.*
The IRS rate is optional. If an employer uses a lower mileage rate than the IRS rate, the employer must show that its rate is sufficient to reimburse employees for their actual expenses.
The IRS made the midyear adjustment because of the recent increases in gasoline prices.
The rate hike adds 4.5 cents to the current rate of 51 cents per mile for the first six months of 2011. The IRS press release is available on the IRS website.
Gail Cecchettini Whaley, CalChamber Employment Law Editor/Staff Counsel
*The law requires employers to reimburse employees for certain expenses. CalChamber members can learn more about this legal requirement from HRCalifornia. Not a CalChamber member? Test-drive HRCalifornia with a 15-day Free Trial.