For 2025, Texas follows the business mileage reimbursement rate set by the Internal Revenue Service. This standard mileage rate is currently $0.70 per mile.

Below is a breakdown of Texas'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 Texas, 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.

State laws don't require Texas employers to reimburse private sector employees for mileage. However, knowing the legal framework can help when offering this benefit.

Several state codes and regulations provide regulations for state employees when using private vehicles for business-related travel.

Understanding Texas government code: sections 660.041 to 660.043

Private businesses in Texas have no obligation to provide mileage reimbursement. State agencies, however, must follow specific guidelines for compensating state employees under Sections 660.041 to 660.043 of the Texas Government Code.

Section 660.041

State employees are entitled to reimbursement when using vehicles for business purposes according to this section.

The compensation covers only mileage beyond regular commuting distances, such as traveling to out-of-town meetings or special assignments. Regular travel between home and workplace doesn't qualify for reimbursement.

Section 660.042

This code establishes the ceiling for reimbursement rates in Texas. The maximum amount allowed equals the total miles traveled multiplied by the approved state mileage rate. For administrative efficiency, this figure typically mirrors the federal rate established by the Internal Revenue Service.

Section 660.043

This code addresses the methodology for calculating reimbursable mileage, establishing that reimbursable miles must follow the most cost-effective route. The guidelines require consideration of multiple variables, not just distance. Safety concerns and overall cost effectiveness can justify alternative routes that still qualify for full compensation.

Implications of non-reimbursement for private employers

The Fair Labor Standards Act creates an important financial consideration for employers. While the law doesn't explicitly mandate mileage reimbursement, it requires that business expenses don't reduce employee compensation below the federal minimum wage of $7.25 per hour in Texas. Companies risk legal exposure when this threshold is crossed due to unreimbursed travel costs.

The other instance in which a private employer may be required to pay mileage reimbursement is when an employee qualifies for Workers’ Compensation. Under Code § 134.110, employees are entitled to mileage reimbursement when it’s necessary to travel 30 miles or further to receive medical care.

For private employers in Texas, implementing a mileage reimbursement policy can be beneficial for legal and practical reasons. While developing such a policy, keep these tips in mind.

Review policies periodically

Periodically evaluate what you're paying per mile against current market conditions. Adjusting rates to reflect changing fuel costs and vehicle maintenance expenses shows employees you recognize the real costs of business driving. Additionally, a regular audit of your policies can ensure your business doesn’t violate minimum wage requirements.

Establish documentation requirements

Create a standard approach for documenting travel details, including starting point, destination, mileage, and purpose. Whether using paper logs or digital tools, having uniform information makes processing claims much more straightforward. Expense management software can streamline this process and eliminate any necessary manual work.

Integrate reimbursement into an expense management software

Expense management software can streamline the entire mileage reimbursement process and integrate other expenses into the same system. This can reduce hours spent on administrative inputs and oversight.

Communicate policies effectively

Make sure every employee understands how your mileage reimbursement works. Clear explanations with practical examples prevent misunderstandings and establish clear expectations in your organization's approach to travel expenses.

Create submission deadlines that work

Develop realistic timeframes for turning in mileage claims and reimbursing those claims. Finding the right balance between prompt submission and employee flexibility helps maintain accurate records without creating unnecessary stress.

Implementing a thoughtful mileage reimbursement policy is a strategic financial decision for Texas employers. While not mandated by state law, proper reimbursement practices align with federal guidelines and can create measurable business advantages.

Companies must also consider the practical operational impact. With the 2025 IRS rate of $0.70 per mile serving as a benchmark, organizations can establish consistent practices that protect both employee compensation and company interests. This balanced approach acknowledges the practical reality that unreimbursed business expenses can effectively diminish worker pay below acceptable thresholds.

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.