Kentucky currently pays state employees 43 cents per mile when they use personal vehicles for official business, according to 2025 guidelines.

Kentucky's reimbursement rates, which you'll find detailed below, are updated quarterly at the beginning of January, April, July, and October. These adjustments respond directly to market conditions tracked in the American Automobile Association's Daily Fuel Gauge Report, which monitors regular unleaded gas prices across Kentucky's regional markets.

Note: Organizations have flexibility to reimburse employees at rates that differ from the IRS standard. However, any reimbursement exceeding the IRS rate will be classified as taxable income to the employee.

Kentucky has set up clear rules for state employee mileage reimbursement through specific codes that ensure fair standards and transparency.

Private employers should know that while these laws don't legally apply to their businesses, they do provide useful guidelines for paying workers who use personal vehicles for work-related activities.

To better understand Kentucky's mileage reimbursement laws, private employers should look at the relevant statutes, starting with Kentucky Revised Statutes (KRS) 64.710, which outlines the basic requirements for state employee travel compensation.

Codes KRS 64.710 and 200 KAR 2:006 for state employees' mileage reimbursement

For state department administrators in Kentucky, mastering the specific statutes that govern mileage reimbursements represents a critical operational responsibility.

The Kentucky Revised Statutes (KRS) 64.710 explicitly bars public officials from accepting lump-sum allowances for vehicle expenses without specific legislative authorization—a provision designed to enhance fiscal accountability and ensure all travel compensation adheres to statutory guidelines.

Further regulatory oversight emerges through Kentucky Administrative Regulations, most notably 200 KAR 2:006, which establishes the methodological foundation for reimbursement procedures. These directives carry particular significance as they establish a direct correlation between compensation rates and the American Automobile Association's Daily Fuel Gauge Report.

The implementation of 200 KAR 2:006 delivers two substantive advantages: it institutes a quarterly adjustment mechanism that accurately reflects contemporaneous fuel pricing, while simultaneously promoting equitable and precise compensation standards for state personnel's transportation expenses.

Kentucky minimum wage act and mileage reimbursement for private employees

The Kentucky Minimum Wage Act currently stipulates minimum wage at $7.25 per hour, matching the federal standard. However, a significant regulatory nuance warrants attention: despite the absence of explicit mileage reimbursement requirements in state statutes, the comprehensive wage protection provisions create notable compliance considerations.

For employers compensating workers at precisely the minimum wage threshold, business-related expenditures absorbed by employees—particularly transportation costs—could effectively reduce actual compensation below the mandated minimum. This creates a subtle yet consequential obligation, as employers bear full responsibility for ensuring that after accounting for all work-related expenses, employee compensation remains above Kentucky's established state minimum.

Efficient mileage tracking saves time for both employees and administrative staff while ensuring accurate reimbursements. Kansas businesses can implement these practical approaches to streamline their processes and improve compliance.

Adopt digital mileage apps

Recommend user-friendly mobile apps designed to automatically track mileage and categorize trips, eliminating manual entry. These applications can detect when employees are driving and automatically record trip distances using GPS technology, allowing staff to easily classify journeys as business or personal with minimal effort.

Use automated reporting tools

Suggest software solutions that integrate seamlessly with payroll and expense management software, facilitating accurate and efficient reimbursements. These tools can apply the correct Kansas or IRS rates automatically, calculate appropriate expense reimbursement amounts, and generate reports for both accounting and tax documentation purposes.

Create a simple submission process

Encourage employers to simplify reimbursement submission procedures, such as using standardized digital forms or templates, for easy completion. Design forms that capture only essential information and implement electronic approval workflows that move requests efficiently through the organization without unnecessary delays.

Conduct regular audits

Advise periodic internal checks to verify mileage accuracy and quickly identify discrepancies or potential issues. Establish a consistent review schedule where financial staff can compare claimed distances against mapping applications, examine trip purposes for eligibility, and ensure proper documentation supports each reimbursement request.

Educate employees on accurate logging

Provide brief training sessions or easy-to-understand guides that help employees clearly distinguish between reimbursable and non-reimbursable mileage. Develop simple reference materials with Kansas-specific examples that illustrate proper classification of common travel scenarios, helping prevent both over-reporting and under-reporting of business miles.

Set reminders for regular mileage reporting

Suggest setting automatic reminders or calendar prompts to encourage timely submissions, ensuring reimbursements are processed promptly. Establish consistent submission deadlines aligned with payroll cycles and send notifications to help employees maintain regular reporting habits rather than accumulating mileage claims over extended periods.

Mileage reimbursement in Kansas balances legal compliance, financial responsibility, and effective workforce management. State statutes like K.S.A. 75-3203a provide clear guidance for compensating employees who use personal vehicles for work tasks, with rates designed to cover all aspects of vehicle operation. While these regulations primarily apply to state employees, private businesses can use these guidelines to develop fair compensation practices that both satisfy legal requirements and enhance employee satisfaction.

Economic conditions and transportation costs continue to influence mileage reimbursement rates. The steady increases from 2022 to 2025 reflect how these compensation mechanisms adapt to changing economic realities. Employers need to stay flexible, finding the right balance between compliance and fair compensation, recognizing that thoughtful expense policies also serve as valuable tools for employee engagement and company reputation.

Brex's expense management software simplifies these challenges through automation features built for modern businesses. The platform streamlines mileage tracking while implementing quick approval workflows that eliminate processing delays. The technology automatically enforces your spending guidelines and properly categorizes transportation expenses for accounting purposes. Sign up for Brex today to transform how your company handles employee reimbursements.