Mileage Expenses - Advice for Employers - Mazars - Ireland

I understand that mileage rates are a good way to reimburse employees tax free. How does it work?

Where employees use their private cars or motorcycles for business purposes, re-imbursement by the employer in respect of allowable motoring expenses can be made by way of flat-rate mileage allowances.

The key issue is whether an employee bears all the motoring expenses. If so, the expenses that can be paid are any amount not exceeding schedule of Civil Service rates. The employee has to submit detailed expense claims which must be kept by the employer as they could be subject to a future Revenue audit. Therefore, the employee just gets compensated for the use of their car on business trips so it is not a tax scheme to get a lot of tax free income to the employee.

The Civil Service motor mileage rates per KM for individuals who are obliged to use their car (or motorcycle) in the normal course of their duties are (with effect from 5 March 2009)

Motor Cars

Motor Cycles

There is also a similar system for subsistence payments.