Commuting Miles vs. Business Miles: What Employers Need to Know

By Nicole Hullihen, former SaaS Chief Operating Officer and Microsoft MVP · Updated November 1, 2026

Mileage gets confusing fast when employees drive for work. Is the drive from home to the first job site business or commuting? What about the drive home from the last job? Does it matter whether the employee uses their own car or a company truck? Getting the answers wrong can mean over-reimbursing, under-reimbursing or creating a tax problem for your employees.

This guide explains the general difference between commuting and business miles, common scenarios for field crews and how to track and reimburse mileage, with a free business mileage log. It's general information, not tax advice; check the details with your accountant or tax advisor.

Commuting vs. Business Miles at a Glance

What the IRS Says About Commuting

An archived IRS fact sheet on car and truck expenses (FS-2006-26) states that costs related to travel between a taxpayer's home and regular place of work are commuting expenses and are not deductible. The same fact sheet lists getting from home to a temporary workplace, when the taxpayer has one or more regular places of work, as a deductible business trip. The IRS also says that taxpayers must substantiate expenses with adequate records.

The rules have details and exceptions, such as home offices and regular vs. temporary work locations, so use these as general guidelines and confirm your situation with a tax professional.

What Is a Temporary Work Location?

In IRS travel rules, an assignment in a single location is generally treated as temporary if it's realistically expected to last, and does in fact last, one year or less. A crew that works at a different customer site each week is usually working at temporary locations. An employee who reports to the same site every day for years is not. How a location is classified affects whether the drive from home is commuting.

Common Scenarios for Field Crews

Free Business Mileage Log Template

What a Good Mileage Log Includes

• Date of each trip
• Starting point and destination
• Business purpose, such as the client or job
• Miles driven, from odometer readings or GPS
• Whether the vehicle is personal or company-owned

Logs written weeks later from memory are less reliable than logs recorded each day. GPS-based tracking makes it easier to keep accurate records. See mileage tracking software.

Reimbursing Employees for Business Miles

Many employers reimburse employees who use their own vehicles for business trips, often at the IRS standard mileage rate. The IRS publishes the rate, and it can change, so check the current rate before setting or updating your policy. See current mileage rates and a free mile tracker.

Reimbursements paid under a plan that requires employees to account for their business miles are generally treated differently for tax purposes than flat allowances paid without records. Ask your payroll provider or accountant to set up your reimbursement plan correctly.

Reimbursing Commuting Miles

Some employers want to help employees with long drives. Be careful: payments to cover ordinary commuting between home and a regular workplace may be treated as taxable wages to the employee rather than tax-free business reimbursements. Talk to your accountant before reimbursing commuting, and run any commuting payments through payroll as directed.

Company Vehicles and Commuting

When employees take company vehicles home, personal use, including commuting, can be a taxable fringe benefit, with special valuation rules and exceptions for certain vehicles. Keep logs separating business and personal miles, write a vehicle use policy and ask your accountant how to value and report personal use. See the fuel log and the vehicle inspection checklist.

Mileage vs. Travel Time Pay

Mileage reimbursement and pay for travel time are separate questions. Whether an hourly employee must be paid for time spent driving depends on wage and hour rules, not mileage rules. For example, driving between job sites during the workday is generally work time, while ordinary home-to-work commuting generally is not. See travel time pay for hourly employees.

Writing a Mileage Policy

Example: A Plumbing Company

A plumbing company reimbursed technicians for every mile on their personal vehicles, including the drive from home to the shop. After a review with its accountant, the company changed its policy: miles from the shop to customer sites and between calls were reimbursed, the drive from home to the shop was not and techs who drove directly to their first call logged trips through a GPS app. Reimbursements dropped, and records were clean enough to support them.

Common Mistakes

• Reimbursing commuting as if it were business mileage.
• No mileage logs or logs created from memory.
• Flat car allowances without understanding the tax treatment.
• Ignoring personal use of company vehicles.
• Confusing mileage with travel time pay.
• Using an outdated mileage rate.

Mileage Policy Checklist

Mileage for Employees With Multiple Work Locations

Some employees split their time between locations, such as two stores or an office and a warehouse. Driving between two work locations during the day is generally a business trip. Which location counts as the regular place of work can affect how the first and last trips of the day are treated, so document each employee's main location and ask your accountant how to treat their trips.

Using GPS to Separate Trips

GPS-based mileage tracking records start and end points automatically, so you can see which trips were between job sites and which were the drive from home. Pairing GPS data with job or client information makes it easier to classify trips correctly and reduces arguments about what should be reimbursed. Tell employees how location data is collected and used. See geofencing time clocks.

Mileage Reimbursement Methods

Each method has different tax and recordkeeping effects. Choose with your accountant, and put the rules in writing.

State Rules on Reimbursing Business Expenses

Some states require employers to reimburse employees for necessary business expenses, which can include using a personal vehicle for work. Even where it isn't required, unreimbursed vehicle costs can reduce an employee's effective pay. Check your state's rules when setting your mileage policy.

Approving Mileage Logs

1. Employee submits the log by the deadline.
2. Manager checks trips against the schedule and job records.
3. Commuting and personal trips are removed.
4. Approved miles are multiplied by the reimbursement rate.
5. Reimbursement is paid through payroll or accounts payable as your accountant directs.

Common Questions From Employees

• "Why isn't my drive to the shop reimbursed?" It's your regular commute, which is generally personal.
• "Do I log the drive between two job sites?" Yes, trips between work locations during the day are business miles.
• "What if I stop at a supplier on my way in?" Log the extra miles for the business stop.
• "Can I take the company truck home?" Follow the vehicle use policy; personal use may be taxable.

Keeping Mileage Records

Keep mileage logs, reimbursement records and vehicle records together. The IRS requires taxpayers to substantiate expenses with adequate records, and your accountant may need the logs to support reimbursements and vehicle deductions. Ask how long to keep them for your business.

Mileage for Employees Who Work From Home

Employees who work from home some days and go to the office on others raise extra questions. Home office rules can change how trips from home are treated, and the answer depends on the details, such as whether the home is the employee's principal place of business. Ask your accountant before setting rules for hybrid employees, and document each employee's regular work location.

Mileage and Job Costing

Business miles are part of the cost of each job. When employees log miles by job or client, you can see the true cost of service calls in distant areas, price jobs that require long drives more accurately and decide whether to charge trip fees. Mileage data also helps plan routes so crews spend less time driving between jobs. See how to track costs by job.

Auditing Mileage Claims

Review mileage claims each month. Compare logged trips with the schedule, job records and GPS data, and look for patterns such as round numbers, the same miles every day or trips on days off. Most problems are honest mistakes, like logging the commute, but regular reviews keep the system accurate and fair to everyone.

Sample Week of Trips for a Field Technician

In this example, the technician drove 57 miles but only 33 are business miles. The classifications follow the general rules described above; confirm your own policy with your accountant.

Mileage Policy for Small Teams

Small businesses don't need a complicated program. Write one page that defines business miles, excludes regular commuting, sets the reimbursement rate, requires a log and names who approves it. Use the log template above or an app, and review claims monthly.

Mileage Quick Reference

Print this table for drivers and managers so everyone classifies trips the same way, and update it if your accountant recommends changes to your policy.

Rolling Out a New Mileage Policy

When you change mileage rules, explain the reasons, give employees a written copy and set a clear start date. Walk drivers through the log or app, answer questions about commuting and review the first month's claims closely. Clear communication prevents most complaints when reimbursements change.

Revisit the policy each year, or sooner if the IRS standard mileage rate changes or your accountant recommends updates. Keep old versions so you can show which rules applied to past reimbursements.

Final Thoughts

The general rule is simple: the drive between home and a regular workplace is commuting, while driving for work during the day is business. The details, such as temporary job sites, home offices and company vehicles, are where it gets tricky. Write a clear mileage policy, require daily logs with the business purpose, reimburse only business miles unless your accountant advises otherwise and keep records that support every payment.

Track Business Miles With Updoot

Updoot's mileage tracking records trips by employee and job, so you can separate business miles from commuting and reimburse from accurate logs.

Sources

• IRS: Car and Truck Expense Deduction Reminders (FS-2006-26, archived)
• IRS: Topic No. 510, Business Use of Car
• IRS: Publication 463, Travel, Gift, and Car Expenses

Frequently Asked Questions