Tennessee currently operates with a standard business mileage reimbursement rate of $0.70 per mile for 2025, a figure that mirrors the federal benchmark established by the Internal Revenue Service. While this rate explicitly governs compensation for qualifying state employees and officials, private sector employers may voluntarily implement this same standard within their organizations.

Below is a breakdown of Tennessee's mileage reimbursement rates following IRS standards in 2025, with a comparison to previous years.

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 Tennessee, 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.

Tennessee state law allows the Department of Finance and Administration to set travel policy under TN Code § 4-3-1008. Under the state’s Comprehensive Travel Regulations, the rules surrounding mileage reimbursement for state employees are set. Although private employers are not bound by these laws, there are instances where businesses can be required to reimburse employees for mileage.

The section below looks at the different laws in Tennessee that cover mileage reimbursement for various types of jobs and work situations.

Tennessee’s Comprehensive Travel Regulations for state employees

Tennessee's Comprehensive Travel Regulations ensures state employees are reimbursed for business-related travel using personal vehicles. State employees can only be reimbursed once authorization is given by a department head, and use of a private vehicle can be banned if unnecessary expenses are accrued.

Under this law, state employees receive reimbursement for work-related travel at the current rate in 2025 is $0.70 per mile.

Minimum wage and Workers’ Compensation

In Tennessee, employers must pay at least the federal minimum wage of $7.25 per hour since the state doesn't have its own minimum wage law. When work-related expenses like mileage would reduce earnings below the federal minimum wage, the Fair Labor Standards Act (FLSA) requires you to reimburse employees for work-related expenses. If you fail to provide these reimbursements when required, your business could face serious legal problems.

Tennessee Code § 50-6-204 also establishes clear obligations for employers regarding injured workers who must travel substantial distances for medical care. Specifically, the state mandates mileage reimbursement when an employee travels to a facility outside of a radius of 15 miles to receive treatment for work related injuries.

Although Tennessee businesses aren’t mandated to reimburse employees for mileage, there are many reasons why such a policy could be necessary. These tips can help your business create a thoughtful reimbursement policy.

Establish documentation standards

Have employees record the basics for each business trip, including starting point, destination, date, purpose, and total miles. Using a standard form or expense management software can help ensure you collect consistent information. This can help ensure you have the documentation necessary for compliance reasons.

Encourage regular submission

Require that employees submit expense claims weekly or bi-weekly. This can help ensure that trips are documented accurately and regular processing prevents large, unexpected reimbursement costs.

Create a clear approval process

Establish a process for mileage approval claims and what triggers additional review. Routine travel should be approved quickly, while unusual patterns might need a closer look. With the right expense management software, this process can be automated and built into the submission process.

Define what counts as business travel

Make clear rules which travel can and can’t be reimbursed. Daily commutes typically aren’t reimbursable, but travel between work sites or to client meetings usually are. This can help set expectations among employees.

Review your reimbursement rates regularly

Audit your mileage reimbursement policies regularly to ensure you’re following IRS standards and to prevent any violations of minimum wage requirements. To lessen the administrative burden, this process can be automated with a platform like Brex.

While the state mandates specific reimbursement rates for government officials at $0.70 per mile in 2025, private employers maintain flexibility in establishing their own policies. This discretion, however, comes with important considerations, particularly regarding minimum wage compliance.

Thoughtful mileage reimbursement policies can represent an investment into your workforce. A standardized approach, like the IRS policy, eliminates ambiguity, reduces administrative friction, and ultimately contributes to stronger financial management across the organization.

For businesses seeking to streamline their expense reimbursement processes, Brex's expense management software offers comprehensive automation capabilities. The platform seamlessly handles expense reimbursement workflows, approval routing, and receipt capture without manual intervention. Its expense policy enforcement ensures consistent application of spending guidelines while integrating essential financial functions including corporate cards, expense management, travel booking, business banking, and bill payment into a unified platform. Sign up for Brex today to transform how your organization manages travel expenses.