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The indispensable facts about mileage allowances

Carol Bernard

Mileage allowances, within the framework of travel expenses, are considered to be a mobility expense. It is an expense about which corporate travellers often have a whole range of doubts. Clear up these doubts with the following article, with the help of Raquel Gutiérrez, TMO (Travel Manager Outsourced) of American Express Global Business Travel Spain.

Mileage allowances are a transport expense and, as such, when we manage mileage, we have to take into account what the company pays within the mileage allowance depending on the type of travel. The concept of mileage encompasses any financial aspect related to the employee’s transport. As such, it can be divided into expenses for:

  • Service costs. For example, in the case of public transport, a taxi or an aeroplane.
  • Consumption and maintenance costs. This is the case of private vehicles.

With respect to private vehicles, Raquel Gutiérrez, TMO of American Express Global Business Travel Spain, uses the following classification:

When an employee travels, for work purposes, either for representation or trips, the company can give them a company vehicle or can compensate the traveller for using their own vehicle.

In the case of a:The_indispensable_facts_about_mileage_allowances_with_the_TMO_Raquel_Gutirrez.jpg

1) Company car. The company normally covers the cost of the fuel and insurance, mainly.

2) Private car. An amount is paid per mile driven. This amount should take into account the sector and other factors such as length of service or responsibility in the company.  

This amount includes:

  • Fuel
  • Wear and tear of the vehicle: tyres, oil, etc.
  • A proportional part of fully comprehensive insurance
  • Other factors

It does not include:

  • Traffic fines and parking fees
  • Mileage covered for activities not related to business

Meanwhile, according to Gutiérrez, other expenses that may be incurred in the case of an employee’s own, apart from mileage, include parking and toll expenses, which are reimbursed separately.

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