Commuting Miles vs. Business Miles: What's the Difference?

By Indeed Editorial Team

Published August 4, 2021

Commuting miles are the amount of mileage that an employee drives to and from work. In comparison, business miles involve the mileage that employees drive to different work locations throughout a workday. Learning the differences between commuting and business miles can help you understand which mileage you may receive reimbursement for. In this article, we discuss various ways that commuting miles and business miles differ from one another.

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What are commuting miles?

Commuting miles represent the distance that an individual travels from their home to their workplace and back. Employers may compensate their employees for driving long commutes to work, though the Internal Revenue Service (IRS) doesn't offer deductions for commuting miles. The length of your commute may be a factor you consider when deciding if you want to work for a company. You may also choose a job depending on if the company decides to reimburse you for long commutes.

While the IRS doesn't usually reimburse employees for commuting miles, they occasionally make exceptions in specific commuting situations. Here are some instances where the IRS may reimburse you for commuting miles:

  • If an employee works a second job and goes directly from their first job to their second job without a break in between

  • If an employee travels to a temporary workplace, which is separate from their standard workplace, directly from their home

Related: Everything You Need To Know About Mileage Reimbursement

What are business miles?

Business miles represent the distance that an individual travels to get from one workplace to another. For example, if a doctor works in numerous clinics, they may travel several business miles to get from one clinic to another. Your employer may provide you with a tracker so that you can track your business mileage automatically, or you may track it manually in a document.

While business miles typically involve the amount of miles that a staff member drives, it can sometimes involve different types of transportation, like airplanes, buses, trains or ride-sharing services. In these cases, the IRS may deduct taxes based on the amount of money that an employee pays for their travels rather than the amount of money they spend on gas.

Commuting miles vs. business miles

Here are several differences between commuting miles and business miles:

Reimbursements

The IRS sometimes offers reimbursements for employees who drive to various work locations throughout the day. Typically, they don't offer reimbursements for commuting miles. The amount that the IRS reimburses to drivers, which is known as the standard mileage rate, changes each year depending on the average price of gas. To find the standard mileage rate for each year, refer to the IRS's website. Here are some situations that the IRS gives reimbursements for:

  • If an employee works from a location that isn't their typical working location for an extended period of time

  • If an employee travels to over one workplace throughout one business day

  • If an employee drives from their permanent work location to a temporary work location more than once throughout the day

  • If an employee works from a home office and sometimes drives to a secondary worksite

Related: How To Ask for Travel Reimbursement for an Interview

Type of mileage

The IRS considers commuting miles and business miles as two separate types of mileage. Commuting miles are personal miles, which means that individuals drive from their home to their workplace and from their workplace to their home. Since it's essential for employees to drive to work each day, the IRS considers commuting miles as daily travel expenses. The IRS considers business miles as extra business expenses, which is why they allow for tax deductions.

Time that the mileage occurs

Commuting miles and business miles typically take place at different times during a workday. Commuting miles often occur before and after work, since they involve an employee's commute arriving and departing from their workplace. Business miles often occur during the workday. Depending on the employee's duties and position, they may only use business miles a few times a day, or they may spend most of their workday driving business miles. For example, a pizza delivery associate may spend most of their shift driving business miles to different deliveries.

Calculation

Commuting miles and business miles involve different calculations. It's less common for employees to calculate commuting miles, since the IRS doesn't reimburse you for the amount of miles you drive to and from work. To calculate commuting miles, find the number of miles that it takes to drive to work each day, then multiply that number by two so that you can account for the drive home. For example, if you live 10 miles from your home, then your daily average commuting miles would be 20 miles.

To calculate the amount of business miles that you drive, add up the amount of miles that you travel between each workplace. Once you add up the total amount of business miles, multiply it by the standard mileage rate for the year. The product of your calculation is the amount that you may be eligible to receive as a reimbursement. For example, if you drive 20 business miles per day, and the standard mileage rate is $0.50, then you'd be eligible to receive $10 as a reimbursement each day.

Related: How Does a Job Relocation Work? (Plus Steps and Tips)

Cost of driving

The cost of commuting miles and business miles refers to the total cost of gas that your car requires while driving. The cost of driving for commuting miles and business miles differs, depending on the length of your commute to work and the amount of business miles you drive each day. Typically, the cost of commuting miles is lower than the cost of business miles, so you may have to drive to several workplaces throughout the day.

Related: How To Determine if a New Commute Is Too Long

Employee control

While employees can decide the amount of miles they commute to work, while business decide the amount of business miles that staff must complete during the workday. If an employee decides that they are commuting further than they would like, then they may decide to pursue a job that involves less commuting miles. They may also decide to use other means of transportation for commuting to work, like using public transportation or carpooling with a colleague.

Employees typically have less control over the amount of business miles they must travel, since their work may require them to travel to various locations throughout the day. For example, a company may assign a sales associate to travel to five different locations to give a sales presentation.

Number of stops

The number of stops that an employee can make while driving differs depending on if they're using commuting miles or business miles. If they're commuting to work, they can make as many stops as they need, since they don't need to track the amount of miles they commute for reimbursement eligibility.

The IRS requires that anyone seeking reimbursement eligibility take straight routes to each workplace, which means they make limited stops along the way to their destination. This can help the IRS track the exact number of business miles that you drive in a workday, which ensures that the reimbursement amount is accurate.

Please note that none of the companies mentioned in this article are affiliated with Indeed.

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