Private employers in New Mexico should note that the state has adopted the IRS standard mileage reimbursement rate of $0.70 per mile for 2025. While state agencies must adhere to this benchmark, private businesses have more flexibility.

Though not legally bound to the IRS rate, private employers would be wise to implement comprehensive mileage reimbursement policies. Establishing clear guidelines that reasonably compensate employees for business-related vehicle use serves as a protective measure against potential conflicts under Section 11.4.3 of the Workers' Compensation Law.

The mileage rate comparison table below shows these figures alongside historical trends.

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 New Mexico, 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.

New Mexico has different laws about mileage reimbursement depending on where you work. State employees are covered by §2.42.2, which clearly spells out who gets reimbursed and how much they receive.

For private businesses, the rules are different. New Mexico law generally doesn't require companies to reimburse employees for mileage. There's one exception though: the Workers' Compensation Law (Section 11.4.3) requires businesses to pay mileage when injured workers travel for treatment.

When private employers understand these legal differences, they can create better policies that fulfill their legal requirements while also taking care of their employees' needs.

Code §2.42.2 for state employees' mileage reimbursement in New Mexico

New Mexico recently changed how it pays state employees for mileage. In the past, these workers got 80% of the previous year's IRS rate. Starting in 2024, they now receive the full IRS rate from the previous year, rounded to the nearest cent.

With this new calculation, state employees get $0.66 per mile in 2024 when they use their own cars for work travel. The New Mexico Department of Finance and Administration sets and oversees these rates to make sure all state agencies pay the same amount.

Note: Only state employees who use their personal vehicles while conducting official duties deemed to be in the state's best interest qualify for mileage reimbursement.

Section 11.4.3 of the workers' compensation act for mileage reimbursement

Private employers in New Mexico face mandatory mileage reimbursement obligations under the Workers' Compensation Act, regardless of their general reimbursement policies.

Section 11.4.3 of the Act specifically requires private businesses to reimburse injured employees for mileage when they travel 15 miles or more one way from either their residence or workplace. The New Mexico Department of Finance and Administration establishes these reimbursement rates for injured workers, which are outlined in a standardized schedule.

Minimum wage considerations for mileage policies in New Mexico

The New Mexico Minimum Wage Act establishes a statewide hourly wage floor of $12.00 per hour, with enforcement handled by the New Mexico Department of Workforce Solutions.

Though the Act doesn't explicitly address mileage reimbursement, it creates indirect obligations for employers. If employees' out-of-pocket mileage expenses effectively reduce their earnings below the minimum wage threshold, employers must compensate for this shortfall.

Section 50-4-20 outlines additional wage requirements that employers must follow. Tipped employees can be paid $3.00 hourly provided their tips elevate their total compensation to at least $12.00 per hour. For workers under 18 years of age, employers may pay a reduced rate of $10.50 per hour during their initial 90-day employment period.

Regularly auditing your employee mileage reimbursement practices helps you maintain compliance, control costs, and ensure fairness. Here's a step by step guide specifically tailored for New Mexico businesses to perform an internal audit effectively:

Step 1: Verify policy compliance with state and federal regulations

Start by checking if your policy matches the current IRS mileage rate of $0.70 per mile for 2025, or clearly explains why you might pay a different amount. Make sure you're following New Mexico's Workers' Compensation Law (Section 11.4.3) by correctly reimbursing injured workers who travel for medical care. Pay special attention to the 15-mile threshold that triggers mandatory reimbursement under New Mexico law, as missing this requirement could create legal exposure for your business.

Step 2: Review mileage tracking procedures

Look through your employees' mileage logs to make sure they're complete, accurate, and consistent across your organization. Consider whether your current tracking methods are working well or if digital apps and GPS technology might reduce errors and save time for everyone involved. Remember that even small discrepancies can add up to significant amounts over time, especially for businesses with employees who regularly travel throughout New Mexico's vast rural areas.

Step 3: Assess timeliness and consistency of reimbursement

Verify that your company is processing expense claims for mileage according to the schedule you've promised employees, whether that's weekly, monthly, or with regular payroll. Look for any patterns of delay or bottlenecks in your approval process and fix these issues to avoid employee frustration. Consistent, predictable expense reimbursement timing is particularly important for employees who travel extensively and may be covering substantial fuel costs upfront in New Mexico's larger cities or across long rural distances.

Step 4: Evaluate employee feedback and satisfaction

Take time to gather input from your employees about how the mileage reimbursement process is working for them through brief surveys or casual conversations. Address any common concerns or confusion by updating your expense policies or providing additional training on proper documentation and submission procedures. Creating a feedback loop shows employees you value their input and can help you identify practical improvements that might not be obvious from a management perspective.

Step 5: Conduct a financial analysis of mileage costs

Regularly review your overall mileage expenses to spot unusual patterns, sudden increases, or opportunities for savings across your organization. Compare mileage costs against business activities to ensure the expenses align with actual business needs and identify any outliers that might need attention. For New Mexico businesses operating across the state's diverse geography, consider whether alternative transportation options like company vehicles or ride sharing services might be more cost effective for certain routes or activities.

For New Mexico employers, it's important to understand the details of mileage reimbursement as part of managing your workforce. State employees follow clear guidelines with rates that match IRS standards. Private employers have more freedom to create their own policies, except when workers' compensation rules require specific payments.

These different requirements show how New Mexico balances regulations with business flexibility when it comes to paying employees back for expenses. Whether you're thinking about minimum wage issues or workers' compensation requirements, a well thought out policy helps your business meet legal obligations while keeping employees happy.

If you want to make these reimbursement processes easier, Brex's expense management software can help. The platform automates everything from when an employee submits an expense to approvals, receipt collection, and enforcing your policies. Brex brings together all your financial tools in one place: corporate cards, expenses, reimbursements, bill payments, travel management booking, and banking. This eliminates the paperwork and administrative hassle that usually comes with managing expenses. Sign up for Brex today to improve how your business handles reimbursements while staying compliant with New Mexico's regulations.