Maine's private employers have flexibility when setting mileage reimbursement rates. Many follow the standard rate set by the Internal Revenue Service, which offers consistency and is well-recognized for tax purposes. Having a clear policy for reimbursements benefits everyone by promoting fairness and transparency.

Private employers in Maine have the option to reimburse employees using the standard IRS mileage rates shown below, which includes a comparison of rates from year to year.

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.

To calculate applicable mileage reimbursement for Maine, do 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.

Maine's mileage reimbursement laws include various provisions, with specific regulations governing state workers and separate guidelines applicable to private businesses.

These established laws, detailed in the following section, promote uniform standards for equitable travel compensation across different employment categories throughout the state.

Title 5 §8 for mileage reimbursement for state employees

Maine's law, Title 5 Code §8, sets the rules for mileage reimbursement for state employees and officials who aren't covered by union agreements or when those agreements don't specify a rate.

Under Maine law, the state currently pays 75% of the federal mileage rate. This will increase to 80% starting November 1 of each calendar year. The law also provides an extra 10 cents per mile for disabled employees who use adapted vehicles.

By tying payments to a percentage of the federal rate, Maine achieves two things at once. It makes sure employees get fair compensation while keeping the state budget under control, and it creates a single, consistent system for mileage payments that works across all state departments.

Maine minimum wage law and mileage reimbursement

Maine law sets the minimum wage at $14.65 per hour starting January 1, 2025. This applies to both public and private employers, including your business.

Under this law, you need to make sure that when employees use their own vehicles for work, any unreimbursed mileage costs don't push their actual earnings below the state minimum wage.

Most of Maine follows the same minimum wage, but Portland has its own higher rate of $15.50 per hour. This local difference is important to note if you have employees working in different parts of the state.

Maine workers' compensation law

Maine's Workers Compensation Law has important rules about travel expenses. When employees have work-related injuries, you must pay for their travel to and from medical appointments. This isn't optional, it's required by law.

The Workers Compensation Law applies to all employers in Maine, whether public or private. Under this law, you must cover mileage costs as part of the medical benefits for employees with work-related injuries. You're also required to pay for medicines and medical equipment like wheelchairs, crutches, and hearing aids along with the mileage expenses.

Implementing effective employee mileage reimbursement policies can simplify compliance, reduce administrative burdens, and boost employee satisfaction. Here are practical best practices to help your business manage reimbursement more efficiently:

1. Clearly document your mileage policy

Establish clear guidelines that detail eligibility criteria, approved travel purposes, and required documentation. Specify whether you follow the IRS rate or Maine's state employee rate. Define which activities qualify for reimbursement, including client visits, off-site meetings, and travel between work locations. Regular communication of your policy helps avoid misunderstandings and ensures transparency among your team members.

2. Regularly review mileage rates and employee expenses

Stay updated with annual IRS and Maine-specific mileage rate changes to ensure your reimbursements remain current. Remember that Maine state rates adjust automatically on November 1st each year based on the federal rate. Schedule periodic audits to verify reimbursements are accurate, consistent, and comply with state and federal guidelines. Consider how Portland's higher minimum wage might affect expense reimbursement considerations for employees working in that area.

3. Use digital mileage tracking solutions

Digital apps and GPS tools allow employees to record their mileage with precision. When you integrate mileage-tracking software with your expense management software, you simplify record-keeping and reimbursement calculations. Maintain electronic records for several years to support potential tax audits or compliance reviews. Solutions that differentiate between business, charitable, and medical/moving mileage categories are particularly valuable since these have different reimbursement rates.

4. Monitor minimum wage compliance

Assess employee expenses regularly to ensure mileage-related costs don't inadvertently lower wages below Maine's state minimum wage or Portland's local minimum wage standards. For employees frequently using personal vehicles, calculate whether unreimbursed travel expenses might reduce actual earnings below minimum wage requirements. Document these checks as part of your ongoing compliance process. Remember that maintaining compliance with Maine's Minimum Wage Law is mandatory, while specific reimbursement rates are generally discretionary.

5. Address workers' compensation requirements

Create separate tracking mechanisms for work-related injury travel reimbursements, which Maine law requires under Workers' Compensation. Establish an efficient process for employees to submit mileage for medical appointments related to workplace injuries. Train managers to handle these specialized reimbursement requests separately from regular business travel. Thorough documentation of all workers' compensation-related travel expenses ensures proper compliance with state regulations.

6. Provide regular employee training

Train your HR and accounting teams on Maine-specific mileage reimbursement requirements, including workers' compensation and minimum wage implications. Educate employees about proper documentation, submission timelines, and how reimbursement impacts their taxable income. Remind staff that reimbursements exceeding the IRS standard rate will be classified as taxable income.

By following these best practices, Maine businesses can ensure accurate, efficient, and compliant management of mileage reimbursements, benefiting both the organization and its employees.

Maine's approach to mileage reimbursement reflects the state's commitment to balancing fair employee compensation with fiscal responsibility. By tying state employee rates to a percentage of federal standards while allowing private businesses flexibility in their policies, Maine creates a framework that adapts to economic conditions without imposing rigid mandates on businesses.

These carefully calibrated reimbursement structures protect workers from shouldering excessive vehicle expenses while giving employers clear guidelines to follow. The differentiated rates for charitable, medical, and business travel further acknowledge the varying contexts in which employees use personal vehicles, providing appropriate compensation for each scenario.

Want an easier way to manage reimbursements? Brex's expense management software streamlines the entire process from capturing receipts to getting approvals. The platform automatically applies your spending rules, reducing paperwork while helping you meet Maine's compliance requirements. By consolidating corporate cards, expense management, AP automation, bill pay, travel management booking, and startup banking on a single platform, Brex offers an integrated solution to what might otherwise be a fragmented process. Sign up for Brex today to transform your company's approach to expense management.