Arizona mileage reimbursement rates and laws (2025)

In fiscal year 2025, Arizona has established a mileage reimbursement rate of 67 cents per mile, a benchmark set by the state's Department of Administration that governs compensation for public employees utilizing personal vehicles for official business.

While this standard creates no binding obligation for private sector employers, implementing comparable reimbursement protocols serves dual strategic purposes: enhancing employer-employee relations through demonstrated financial consideration, and mitigating potential legal exposure, particularly in workers' compensation scenarios as articulated in Statute 23-1062.

The following tabular analysis presents a comprehensive view of Arizona's reimbursement rates as codified in Section 5095 of the State of Arizona Accounting Manual (SAAM), offering context for organizations evaluating their compensation frameworks.

The regulatory framework governing mileage reimbursement in Arizona establishes distinct protocols for public and private sector employers. Statute 38-623 provides the foundational requirements for state employee travel compensation, while private sector obligations operate under separate statutory provisions.

Private employers maintain discretionary authority over general mileage reimbursement policies, with mandatory requirements primarily limited to specific circumstances involving worker injury claims. The following analysis examines these key statutory provisions and their implications for employer compliance.

Mileage reimbursement for state employees under statute 38-623

The Arizona Department of Administration (ADOA) establishes structured protocols for state employee mileage reimbursement, as codified in Section 5095 of the State of Arizona Accounting Manual (SAAM). For fiscal year 2024, the established reimbursement rate is 65.5 cents per mile.

Statute 38-623 delineates the regulatory framework governing state employee travel reimbursement, establishing mandatory compensation requirements for official state business conducted using private vehicles. The statute prescribes specific criteria for reimbursement eligibility and calculation methodologies.

Reimbursement calculations must utilize the most direct route, as determined through either official highway mapping resources or documented odometer readings, ensuring accurate and verifiable distance measurements for compensation purposes.

Note: Statute 38-623 stipulates that when multiple state employees travel together in a single vehicle, only one individual may submit a claim for mileage reimbursement.

Arizona statute 23-1062 and its impact on mileage reimbursement

Arizona Statute 23-1062 of the Workers' Compensation Law establishes mandatory travel reimbursement provisions applicable to both public and private sector employees seeking medical treatment for work-related injuries.

The statute mandates employer reimbursement at a rate of 65.5 cents per mile when medical treatment necessitates travel exceeding 25 miles from the employee's residence. This provision ensures comprehensive coverage of necessary medical travel expenses incurred during the course of workers' compensation claims.

How the fair wages and healthy families act influences mileage reimbursement

The Arizona Fair Wages and Healthy Families Act establishes comprehensive wage requirements, with the current minimum wage set at $14.70 per hour effective January 1, 2025.

Statutory exemptions apply to specific categories of employers, including those employing immediate family members (parents or siblings) and enterprises generating annual revenue below $500,000 that qualify for exemption under Federal Minimum Wage Law provisions.

Note: For tipped employees, the Act permits a maximum tip credit of $3.00 per hour, provided that combined wages and tips meet or exceed the standard minimum wage requirement.

While the Act does not explicitly address employee mileage reimbursement, employers must ensure that unreimbursed travel expenses do not effectively reduce employee compensation below the statutory minimum wage threshold. This creates an implicit obligation to monitor the impact of business-related travel expenses on overall employee compensation to maintain compliance with minimum wage requirements.

Staying compliant with Arizona's mileage reimbursement regulations doesn't have to be complicated. Yet many growing businesses find themselves making costly mistakes that impact both their bottom line and employee satisfaction. At Brex, we're committed to helping businesses streamline their financial operations while maintaining regulatory compliance. Let's explore the most common mileage reimbursement pitfalls in Arizona.

Ignoring the 25-mile workers’ compensation threshold

Did you know that Arizona Statute 23-1062 requires employers to reimburse employees who travel more than 25 miles for medical appointments related to workplace injuries? Many businesses overlook this critical threshold, potentially exposing themselves to compliance issues and employee dissatisfaction.

Using outdated state mileage rates

Arizona's Department of Administration regularly updates the state mileage reimbursement rate, which currently stands at $0.67 per mile for fiscal year 2025. Businesses that fail to update their reimbursement policies accordingly risk underpaying employees and creating unnecessary financial friction.

Under-documenting travel distances

Clear documentation isn't just good practice—it's essential for defending reimbursement decisions during audits or disputes. Many Arizona businesses lack robust protocols for verifying travel distances, creating potential compliance gaps.

Overlooking minimum wage implications

One of the most financially significant oversights involves Arizona's minimum wage law. When business-related driving expenses aren't properly reimbursed, an employee's effective hourly rate may fall below the current $14.70 minimum wage (as of January 2025), triggering compliance issues.

Arizona's mileage reimbursement framework establishes distinct regulatory standards for public and private sector employers. While state employees operate under the structured protocols of Statute 38-623 with a current reimbursement rate of $0.67 per mile, private sector employers maintain discretionary authority over general reimbursement policies. Nevertheless, strategic implementation of comparable reimbursement protocols serves dual purposes enhancing employer-employee relations and mitigating potential legal exposure, particularly in workers' compensation scenarios under Statute 23-1062.

Effective compliance requires vigilant attention to several critical factors including adherence to regulatory thresholds, maintaining current reimbursement rates, documenting travel distances accurately, and ensuring minimum wage compliance after accounting for travel expenses. These components collectively constitute a comprehensive approach to mileage reimbursement management that aligns with Arizona's regulatory framework while optimizing operational efficiency.

Brex's expense management software addresses these compliance challenges through intelligent automation, streamlining the entire expense reimbursement process from end to end. The platform automatically applies the latest mileage rates, flags expenses exceeding regulatory thresholds, automates approval workflows, captures receipts digitally, and enforces spending policies without manual intervention. By combining corporate cards, expense management, reimbursements, bill pay, travel management booking, and startup banking on a single integrated platform, Brex eliminates the fragmentation and inefficiencies that typically characterize expense management. Sign up for Brex today to transform your organization's approach to expense management while ensuring seamless compliance with Arizona's mileage reimbursement regulations.