California mileage reimbursement rates and calculator (2025)

California has aligned with the 2025 IRS standard mileage rate of $0.70 per mile for business travel. This comprehensive rate, implemented in January 2025, addresses the full spectrum of vehicle operating costs. From routine fuel and maintenance expenses to long-term considerations like depreciation and insurance, the rate accounts for registration fees, repairs, and potential collision expenses.

To understand how these rates have changed, consider the following historical analysis:

To calculate applicable mileage reimbursement for California, use the following:

1. Select the appropriate tax year for your calculation period
2. Enter the total miles driven to compute eligible reimbursement amounts

The calculator below provides precise reimbursement figures based on current rates and specified mileage inputs.

California Labor Code Section 2802 establishes comprehensive employee protection requirements, mandating employer reimbursement for all expenses incurred during business operations. This statute requires compensation for business-related vehicle usage across various professional activities, including client engagement, participation in off-site meetings, business travel, delivery services, and work-related errands.

Key provisions of labor code section 2802

California Labor Code Section 2802 establishes mandatory reimbursement requirements for expenses incurred by employees in the execution of their professional duties. The statute encompasses mileage compensation, with reimbursement calculations based on business-related travel distances, excluding standard commuting expenses.

This provision ensures that work-related travel expenses do not create financial burden for employees. Employers bear responsibility for maintaining accurate documentation and implementing appropriate compensation protocols to ensure compliance with statutory requirements.

California mileage reimbursement laws vs. federal laws

The regulatory framework for employee mileage reimbursement differs significantly between federal and California state law. While federal guidelines establish optional IRS standard mileage rates primarily for tax purposes, California Labor Code Section 2802 mandates comprehensive reimbursement for business-related vehicle expenses.

California employers must provide full compensation for actual expenses incurred during business-related vehicle usage. While multiple reimbursement methodologies are permissible—including lump-sum payments, actual expense reimbursement, or Fixed and Variable Rate (FAVR) plans—all must ensure complete coverage of employee expenses under California law.

Non-compliance with California's mandatory reimbursement requirements carries significant legal risk, including potential class action litigation and statutory penalties. This contrasts with federal regulations, where reimbursement disputes typically remain internal matters unless they implicate Fair Labor Standards Act (FLSA) violations.

Note: The Fair Labor Standards Act of 1938, commonly referenced as FLSA, establishes no explicit federal requirement for mileage reimbursement. Nevertheless, employers should remain cognizant of potential compliance implications: circumstances where unreimbursed travel expenses effectively reduce employee compensation below the federal minimum wage threshold may constitute FLSA violations under Department of Labor interpretations and relevant case law precedents.

California's strict mileage reimbursement requirements under Labor Code Section 2802 establish clear obligations for employers throughout the state. With the 2025 rate set at $0.70 per mile, businesses must implement thorough reimbursement practices that cover all work-related travel expenses. This stands in contrast to federal regulations, which provide optional guidelines rather than mandatory requirements, highlighting California's stronger employee protections.

Companies operating in California must maintain detailed documentation and establish consistent reimbursement protocols to ensure compliance. The potential legal and financial consequences of non-compliance can be significant, including class action litigation and statutory penalties. Proper implementation of mileage reimbursement policies serves both regulatory requirements and creates a more positive work environment where employees feel valued and fairly compensated.

Brex's expense management software offers California businesses an effective solution for managing these mileage reimbursement requirements. The platform streamlines the entire expense reimbursement process through automation, allowing employees to submit mileage claims digitally while providing managers with tools to set appropriate spending limits. Its integration with accounting systems eliminates manual data entry and reduces errors, ensuring accurate record-keeping for compliance purposes. By implementing Brex's expense management solution, businesses can transform a potentially complex regulatory obligation into a smooth, efficient process that saves time, improves employee satisfaction, and protects the company from costly compliance issues. Sign up for Brex today to transform your organization's approach to expense management and mileage reimbursement.