You aren't legally required to use the 2025 IRS standard business mileage rate of $0.70 per mile in Massachusetts. The state's mileage reimbursement law allows you to set higher rates that better reflect your employees' actual costs.

Below you'll find Massachusetts mileage reimbursement rates for 2025 and previous years, which align with the IRS standard rates.

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 Massachusetts, 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.

Massachusetts sets clear guidelines for mileage reimbursement in the Code of Massachusetts Regulations Minimum Wage (27.04).

As an employer, you're responsible for covering your employees' work-related travel expenses. This includes miles driven, parking costs, tolls, and similar business expenditures.

However, you aren't required to reimburse personal detours or non-work travel. The law focuses specifically on legitimate business expenses incurred during employment.

Scope of reimbursement under Massachusetts general law (MGL), chapter 151 (section 2)

Massachusetts General Law chapter 151 (section 2) specifies which employees must receive mileage reimbursement. The law applies to workers in various "occupations" who use personal vehicles for work purposes.

Those entitled to reimbursement include office workers traveling for business, service technicians visiting customer locations, delivery drivers, home health aides traveling to patients' residences, field researchers conducting off-site work, and government employees on official travel.

The law does exempt certain workers from these requirements. These exemptions include agricultural and farm workers, participants in rehabilitation or training programs, seasonal camp counselors and trainees, members of religious orders, and outside sales personnel who don't report to an office daily.

Note: Massachusetts mileage reimbursement code also requires payment for travel time when employees must visit specific locations before reaching their regular workplace. If your employees need to pick up supplies, attend meetings, or make stops at your request before arriving at their usual work site, you must compensate them for this travel time both to and from these locations.

At the federal level, employers have discretion regarding employee mileage reimbursement for business travel. Federal guidelines allow you to determine whether and how much to reimburse, provided your employees' total compensation remains above the federal minimum wage of $7.25 per hour after accounting for work expenses.

Massachusetts law, however, is more stringent. The Code of Massachusetts Regulations Minimum Wage 27.04 explicitly requires employers to reimburse all employee travel expenses, including mileage, parking fees, and tolls. This helps ensure compliance and prevent disputes. Keep in mind that Massachusetts has a higher minimum wage of $15.00 per hour.

The state regulations also require you to maintain detailed records documenting these reimbursements to verify compliance with the law.

Accurate documentation is essential for complying with Massachusetts' strict mileage reimbursement laws. Proper record-keeping protects your business from costly legal disputes, audits, and penalties. Here's what Massachusetts employers should include in their mileage documentation:

1. Mileage logs

Require employees to maintain clear records of all reimbursable business trips, noting dates, destinations, purpose, and total miles traveled. Consider using digital tracking apps to simplify and automate mileage record-keeping.

2. Receipts and proof of expenses

Employees should submit receipts for tolls, parking fees, or any other reimbursable travel-related costs. Maintain digital or physical copies of these receipts to substantiate your reimbursement claims.

3. Reimbursement policies

Provide employees with clearly outlined written reimbursement policies, specifying what qualifies for reimbursement and what does not. Update policies annually, clearly communicating any changes or updates to your team.

4. Payment records

Keep detailed records of reimbursement payments, including amounts, dates of payment, and the employee's acknowledgment of receipt. Store payment records securely for at least three years to satisfy Massachusetts' wage-and-hour record-keeping requirements.

5. Regular compliance audits

Conduct periodic internal audits to verify your business's mileage reimbursement practices align with Massachusetts law, specifically CMR 27.04 and MGL Chapter 151. Address any discrepancies immediately, ensuring your company remains fully compliant and prepared in the event of an external audit.

By prioritizing thorough and consistent record-keeping, Massachusetts businesses can streamline compliance, avoid costly legal risks, and demonstrate their commitment to fair and transparent employee compensation practices.

Massachusetts employers face distinct obligations regarding travel reimbursement that stand in marked contrast to the more permissive federal framework. While federal guidelines merely require that employee compensation remains above the federal minimum wage after accounting for work expenses, Massachusetts law explicitly mandates full reimbursement for business travel costs. This requirement, codified in state wage regulations and Chapter 151 of Massachusetts General Law, encompasses mileage, parking fees, tolls, and other legitimate business expenditures.

The financial implications for businesses operating in Massachusetts are significant, with current mileage reimbursement rates set at $0.70 per mile for 2025. Companies have flexibility to exceed the standard IRS rate, though excess payments become taxable income for employees. Proper documentation of these expenses represents an essential compliance measure, as the state's $15 minimum wage and stringent record-keeping requirements create a more demanding regulatory environment than exists at the federal level.

Brex's expense management software offers Massachusetts employers a complete solution for managing these complex reimbursement demands. The platform automates expense reimbursement workflows, streamlines approval processes, captures receipts without manual intervention, and enforces spending policies automatically based on predefined rules. Brex brings everything together in one place: corporate cards, expense management, bill pay, travel management booking, and startup banking. This approach lets you keep accurate records and reimburse employees promptly for their business travel. Sign up for Brex today.