Business mileage reimbursements in North Carolina should follow the 2025 IRS standard rate of $0.70 per mile, aligning with state guidelines detailed in G.S. 138-6(a)(1). Although private sector businesses are not legally required to adhere to this rate, compliance helps avoid potential legal complications.

The following table presents a comprehensive view of the current North Carolina mileage reimbursement rates according to IRS standards, along with comparative analysis of year over 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 North Carolina, 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.

North Carolina differs from many other states because it doesn't have laws that make private employers pay for employee mileage. Still, following certain state guidelines and federal rules (which I'll explain below) is important for businesses that want to avoid potential legal problems.

North Carolina's code G.S. 138-6(a)(1)

North Carolina statute G.S. 138-6(a)(1) legally requires employers of state workers to provide mileage reimbursement at rates not exceeding the IRS standard business mileage rate.

This statutory provision serves multiple purposes. The regulation promotes uniformity and fiscal accountability throughout various state departments while simultaneously maintaining alignment with federal standards.

Private employers can also benefit from voluntarily following these same guidelines. By adhering to the standards established in G.S. 138-6(a)(1), businesses automatically satisfy federal requirements and establish reimbursement practices characterized by fairness and transparency.

North Carolina wage and hour act

While the North Carolina Wage and Hour Act functions primarily as a regulatory framework for minimum wage and overtime matters, its scope extends to issues surrounding mileage reimbursement as well.

The legislation contains provisions suggesting that employers who do not compensate workers for essential expenses like mileage may face legal consequences if such practices cause employee earnings to drop below the state minimum wage of $7.25 per hour. This interpretation creates an indirect obligation for employers to consider transportation costs in their overall compensation calculations.

Federal regulations vs North Carolina mileage reimbursement laws

Looking at both North Carolina state laws and federal regulations shows some important differences in mileage reimbursement rules. The Fair Labor Standards Act doesn't specifically require employers to pay back business mileage, but many companies choose to follow IRS guidelines anyway.

For businesses in North Carolina, following these federal guidelines makes good sense. The state doesn't have extra mileage reimbursement laws, but still expects companies to follow federal standards. This approach has several benefits for employers.

Companies that do this avoid potential tax headaches. These policies help create fair pay systems throughout your business. Most importantly, they ensure employees get fully paid back for work-related travel expenses they incur while doing their jobs.

North Carolina employers must recognize that the costs and challenges employees face driving for work vary significantly depending on whether they're in rural or urban areas. Customizing your company mileage reimbursement policy with these differences in mind can help you support employees better and stay competitive.

Reimbursement considerations in rural North Carolina

Employees in rural regions often cover greater distances for tasks like client visits, deliveries, or medical appointments. Consider higher cumulative mileage when setting reimbursement policies, ensuring employees aren't financially burdened by longer trips. Address limited public transportation options by offering clear, supportive mileage reimbursement rates, closely matching IRS guidelines.

Mileage reimbursement in urban areas (Charlotte, Raleigh-Durham, Greensboro)

Employees in urban areas face different challenges like heavier traffic congestion, increased fuel consumption, and higher parking costs. Clearly define if and how your policy covers parking, toll fees, and congestion-related expenses to avoid misunderstandings. Evaluate reimbursement policies regularly to ensure urban workers' costs, such as paid parking, are adequately compensated.

Balancing policies for multi-location businesses

For businesses operating in both rural and urban locations, clearly communicate any differences in reimbursement practices across locations. Create flexible, location-specific guidelines to address varied travel conditions while maintaining fairness and consistency.

North Carolina keeps things simple with mileage reimbursement by following IRS standards instead of creating its own rules for private employers. This means businesses can just use the federal rate of $0.70 per mile as a clear guideline that works for both state and federal requirements.

When companies pay fair mileage reimbursements, everyone wins. Employees are happier, and businesses protect themselves from wage law problems. These practices show good business sense and a commitment to treating workers fairly.

Many companies now use technology like Brex's expense management software to handle all this. Brex can automatically process expense reimbursements, approvals, receipt collection, and enforces your policies. What makes Brex especially useful is how it brings everything together in one place: corporate cards, expense tracking, reimbursements, bill payments, travel booking, and startup banking. If you want to simplify your financial operations while staying consistent with your reimbursement policies, sign up for Brex today.