Mileage Reimbursement Law Requirements in New Jersey (NJ)

With the high cost of operating an automobile, gas and insurance prices being higher than ever and many of us having to travel for work I was curious to see how employers were compensating for the increased travel expenses. I was surprised to learn that there is no law in New Jersey that requires employers to pay a certain mileage rate. In my research I found that the only laws governing reimbursement for mileage are with regard to employees of the state, and claimants of Workers Compensation benefits.

For the state employees using personal vehicles to travel on official business, the mileage rate is $.31 and has been since 2001. In addition to mileage, parking and toll charges are allowed. Employees should consider all costs associated with travel and use the most economical and efficient means available. Use of public transportation should be considered. Also, they are allowed to pay a mileage expense in lieu of actual transportation costs so it is in the employee’s best interest to use the most affordable mode of transportation available.

Most employers in the private sector will use the states guidelines as a basis for their own policies and procedures on travel expenses, however most pay a mileage rate at or near the federal standard. Each year the IRS based on the fixed and variable costs of operating an automobile sets a standard mileage rate. The rate for 2006 is $.445 per mile. If you are given a mileage rate and it is below the federal standard amount than you may be able to claim the difference, however if you are paid at a higher rate, the excess may be considered taxable wages. If you are not already aware of your business travel policies, it would be a good idea to discuss them with your employer.