For 2025, South Dakota pays state workers $0.67 per mile when they use their own cars for work travel. When employees choose personal vehicles despite having access to state cars, they receive $0.30 per mile, or 45% of the full rate. Per Statute § 3-9-1, South Dakota typically sets the reimbursement rates on October 1 of the preceding year, so 2025’s rates were set on October 1, 2024. As a result, South Dakota’s current reimbursement rates are the rates set by the Internal Revenue Service (IRS) last year.

Private businesses are not required to use these specific rates, but implementing these same policies can help businesses stay within South Dakota's Minimum Wage Law requirements.

Below is a breakdown of South Dakota's mileage reimbursement rates which vary by vehicle type and use.

Note: Private 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 South Dakota, 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.

Implementing South Dakota's mileage reimbursement guidelines can protect your business from legal problems and lawsuits, even though state law doesn’t require private employers to pay for mileage.

The key policies range from specific rules for government workers under §3-9-1 to general recommendations for private companies. Here's a list of important policies that could affect how you run your business.

Statute §3-9-1 for state employees' mileage reimbursement

South Dakota's Bureau of Finance and Management handles mileage payments for state workers under Statute §3-9-1. When employees use their own cars for state business, they’re repaid at the standard rate.

State law also gives people with special needs who use modified vehicles a higher payment rate of 130% of the standard rate. This higher rate also applies to privately owned passenger or cargo vans, pickup trucks, and SUVs.

Workers’ Compensation law and its impact on mileage reimbursement

If an employee gets injured while on the job and qualifies Worker’s Compensation, your business may have to reimburse any mileage traveled for your employee to receive medical care.

In South Dakota, if an employee travels more than 60 miles to receive medical care, your business does not need to provide mileage reimbursement under the state's Workers’ Compensation laws, or Statute 62-4-1, with some exceptions.

Here's a quick look at the mileage reimbursement rates for injured workers.

South Dakota minimum wage law and mileage reimbursement

While the Minimum Wage Law doesn't force you to pay for mileage, you must make up the difference if car expenses for work drop your employees' pay below these minimums. The current minimum wage in South Dakota is $11.50 per hour.

For private employers in South Dakota, mileage reimbursement policies can have several benefits. If your business is considering implementing such a policy, keep these tips in mind.

Define business travel

Establish transparent guidelines about what qualifies for reimbursement. Help employees distinguish between personal commuting and legitimate business travel to prevent confusion and ensure fair application of your policy.

Simplify your approvals

Streamline how mileage claims move from submission to payment. Create a straightforward process that balances necessary oversight with quick processing to keep reimbursements running smoothly. Expense management software can automate this process and eliminate manual errors.

Set a regular submission and reimbursement schedule

Establish consistent timeframes for submitting and reimbursing travel expenses. Whether weekly, bi-weekly or monthly, regular submissions and payments help employees maintain accurate records and allow finance teams to process reimbursements more efficiently.

Create straightforward documentation standards

Develop systems for recording essential trip information without creating excessive paperwork that discourages prompt and accurate reporting. Focus on capturing necessary details, such as starting point, destination, date, purpose, and total miles. Integrating software into your reimbursement process can automatically generate necessary documentation.

Conduct periodic policy audits

Schedule regular reviews of your reimbursement rates and procedures. Market conditions, fuel prices, and business needs evolve over time, making periodic adjustments essential for maintaining an effective program. This can also help ensure that your business is in compliance with minimum wage requirements.

While maintaining flexibility for private businesses, the framework established by statutes like §3-9-1 provides clear guidelines that help companies manage travel expenses effectively. Companies that implement thoughtful reimbursement policies can find the investment pays dividends through improved retention and workplace satisfaction.

Brex's expense management software offers South Dakota businesses a streamlined solution to these reimbursement challenges. The platform automates expense reimbursement processes, simplifies approvals, captures receipts digitally, and enforces expense policies without manual oversight. By combining corporate cards, expense management, automated bill pay, and accounting automation on a single platform, Brex eliminates the administrative burden that often accompanies mileage tracking and payment. Sign up for Brex today.