For 2025, Minnesota has established a standard business mileage reimbursement rate of $0.70 per mile. This figure adjusts under specific circumstances. When employees decline available state-owned vehicles, the reimbursement decreases to $0.63 per mile. Conversely, users of specially equipped vans with accessibility modifications such as wheelchair ramps or lifts receive a higher rate of $0.79 per mile.

The accompanying table provides an overview of Minnesota's current reimbursement rates, showing how they correspond with standard IRS rates and presenting an analysis of year-to-year rate changes.

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 Minnesota, 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.

Minnesota private sector employers should note the distinction in mileage reimbursement requirements compared to state agencies. While state employees must receive compensation for work-related vehicle use, private businesses operate under different guidelines. Nevertheless, all employers across Minnesota remain bound by both the Workers' Compensation Claim Statute and the Minnesota Minimum Wage Law, regardless of their public or private status.

The following section provides information about Minnesota's governing statutes and regulations for mileage reimbursement, offering essential context for proper implementation and compliance.

Mileage reimbursement for Minnesota state employees

Minnesota state agency policies specify that employees cannot receive both mileage and periodic allowances concurrently, as this constitutes non-compliance. Agencies must select just one reimbursement method.

In addition to mileage compensation, Minnesota reimburses state employees for actual parking fees and tolls incurred during work-related travel. The state does maintain certain limitations, however. Regular commuting distances between an employee's home and primary workplace do not qualify for reimbursement. Furthermore, the state will not cover expenses that exceed standard commercial cost thresholds.

Minnesota workers' compensation claims statute

Private sector employers in Minnesota still bear responsibility for certain mileage reimbursements through Minnesota’s Workers' Compensation requirements. When employees suffer job-related injuries or illnesses, Minnesota law entitles them to mileage compensation for travel to medical appointments and vocational rehabilitation services.

The Workers' Compensation Act further requires private employers to pay for both travel mileage and parking expenses associated with employee rehabilitation activities. Companies must calculate these reimbursements using the most direct route between the workplace and healthcare facilities or rehabilitation centers, in accordance with state guidelines. These provisions ensure injured workers can access necessary care without financial burden.

Proper employee mileage reimbursement practices help Minnesota employers reduce legal liability, improve employee satisfaction, and avoid costly disputes. By implementing these straightforward strategies, your business can maintain compliance while streamlining the reimbursement process for everyone involved.

Create and regularly update a clear mileage reimbursement policy

Every Minnesota business should maintain a written mileage reimbursement policy that clearly outlines all procedures and expectations. Review and update your policy at least annually to reflect current IRS or state rate changes. Your policy should specify the exact reimbursement rate, reporting requirements, submission deadlines, and approval process.

Communicate clearly and regularly with employees

Even the best expense policy fails without proper communication about expectations. Schedule regular reminders about mileage tracking, especially when rates change or after identifying common reporting errors. Create simple reference guides that employees can easily access when completing their expense reports.

Implement effective mileage tracking

Reliable tracking methods significantly improve accuracy and reduce administrative burden. Consider mobile apps that automatically track business trips using GPS technology, allowing employees to classify journeys with minimal effort. Ensure your tracking captures essential information: travel dates, locations, business purpose, and total miles driven.

Conduct periodic mileage reimbursement audits

Review a sample of mileage claims quarterly to check that reported distances match reasonable expectations for stated destinations. Look for common errors like duplicate submissions, personal travel mixed with business mileage, or calculation mistakes. Address any patterns promptly through targeted training or policy clarifications.

Train managers and HR personnel on reimbursement requirements

Staff responsible for approving mileage expense claims need proper training on your policies and Minnesota's regulations. Schedule annual refreshers covering current rates, documentation standards, and common compliance pitfalls. Include practical exercises with sample claims for reviewers to evaluate.

Minnesota handles mileage reimbursement differently for state workers versus private employees. For state employees, it's mandatory, with specific rates: $0.70 per mile standard, $0.63 when someone turns down a state vehicle, and $0.79 for specially equipped accessibility vans. Private businesses can set their own policies, but all employers must follow Workers' Compensation rules, especially when employees need to travel for medical care after getting hurt at work.

Good reimbursement practices do more than just keep you legal. When companies fairly pay for work-related travel, they show they value their employees, which often leads to better retention and happier workers. Clear reimbursement rules also reduce arguments, make paperwork easier, and create predictability for everyone, helping the workplace run more smoothly.

For businesses seeking to simplify their mileage and expense management, Brex's all-in-one software platform presents an effective solution. Brex automates the entire reimbursement workflow from initial expense submission to final approval while capturing receipts digitally and enforcing predetermined spending policies without manual intervention. Brex consolidates essential financial functions including corporate cards, expense tracking, reimbursements, bill payments, travel management booking, and startup banking into one single place. Sign up for Brex today to transform your company's approach to expense management.