Mileage Reimbursement in Connecticut

Let’s imagine you manage a sales team at a firm in Hartford, Connecticut. Your employee, David, logs around 300 work-related miles every week visiting clients, picking up event materials, and heading to different offices. That might not sound like much at first, but consider the monthly total: 1,200 miles. Even if David’s car gets 25 miles per gallon, he’s using about 48 gallons of gas monthly just for work. At $3.50 per gallon, that’s $168 out of his pocket each month—just on fuel. Add in oil changes, tire wear, and depreciation, and David’s personal costs soar.

Do you have to reimburse mileage in Connecticut?

In Connecticut, private businesses typically aren’t legally required to pay mileage for every trip employees make in their own vehicles (unless there’s a specific contract or policy in place). There are two cases where reimbursement does have to be paid, namely in cases of workplace injury and minimum wage laws. 

Workplace injury

Let’s say David is injured on the job—maybe he slips on a wet office floor. If he needs to see a doctor or physical therapist, and those medical visits are related to the workplace injury, Connecticut law does require you to pick up the tab for his travel. It’s not optional; it’s part of the Workers’ Compensation rules. Even if you don’t usually reimburse for business miles, in this scenario, you must cover those trips (including mileage, parking fees, and potentially tolls).

Minimum wage rule

In addition to keeping employees happy, a fair reimbursement policy helps ensure that out-of-pocket vehicle expenses don’t push workers’ effective pay below Connecticut’s minimum wage ($15.00/hour as of mid-2023). If someone’s using their own car heavily for company tasks and isn’t being reimbursed, they might claim they’re effectively earning less than the legal hourly rate after expenses. Proper mileage compensation helps you avoid that sticky situation.

Why should I reimburse for mileage as a private employer?

Even though it isn’t required in Connecticut, many employers still choose to reimburse at or below the IRS standard mileage rate. Here’s why:

It keeps employees happy. Covering mileage isn’t just about numbers; it shows your team you care. If David feels like he’s being compensated fairly, he’s more likely to remain motivated and loyal.

Real-World Numbers: How Reimbursement Adds Up

Let’s break down a hypothetical monthly snapshot for David:

300 work miles per week × 4 weeks = 1,200 miles

IRS Rate (2023) = $0.655 per mile

Total Reimbursement = 1,200 × 0.655 = $786

If you opt not to reimburse, David could be footing an extra $786 every month. Over a year, that jumps to $9,432. He can’t claim that expense specifically, since under the Tax Cuts and Jobs Act, the standard deduction was raised and unreimbursed expenses deductions eliminated. Therefore, this tax policy disproportionately affects David, and his employer is in a position to offer him a great benefit.

It’s easy to do. Each year, the IRS sets a rate that’s designed to reflect typical costs of owning and operating a car. Recently, the rates have looked like this:

2025: $0.70 per mile

2024: $0.67 per mile

2023: $0.655 per mile

2022: $0.625 per mile

If you go with, say, $0.655 per mile for 2023, then David’s 1,200 monthly miles translate to $786 in reimbursement. That covers gas, maintenance, insurance, and depreciation in one tidy formula. 

However, the IRS rate causes problems with high mileage, and low mileage drivers. If they’re required to have a car, but don’t drive much, their ownership costs are too high for a cents per mile reimbursement to make sense. And if they’re too high, the IRS rate substantially overpays. That’s why Connecticut firms use reimbursement programs that blend cents per mile reimbursements with fixed allowances, to cover ownership and operating expenses. See these two programs: FAVR and TFCA.

You can avoid extra taxes. Unlike a taxable car allowance, as long as you stick to (or below) the IRS rate, the reimbursement isn’t taxable income for David. If you pay more than the IRS suggests, the difference usually gets taxed.

Documenting reimbursements

If you’re reimbursing for mileage, good recordkeeping is crucial. You’re going to need a log that has information like the date, departure and arrival locations, total miles, and the business purpose of the trip. Organizations these days prefer digital tracking apps that automatically record distance via GPS and other trip data. 

The best reimbursement programs: consider FAVR

FAVR is a data-driven approach that factors in local fuel prices, insurance rates, and maintenance costs, allowing you to offer more precise reimbursements. In many cases, businesses report saving 30% on overall vehicle expenses when using FAVR programs (compared with the IRS rate, and also fleet and taxed allowance), because they’re neither overpaying nor underpaying.

Practical tips for Connecticut employers

Know the IRS rates and rules. They’re updated annually. Matching them is often the easiest route.

Track everything: Paper logs, spreadsheets, or apps—whatever you choose, be consistent.

Do right by injured employees: If an employee needs medical attention for a workplace injury, you have to cover the travel.

Consider tech solutions: Automated mileage tracking can reduce errors, disputes, and paperwork.

Keep employees in the loop: Clear communication about your policy prevents misunderstandings.

Should I start doing mileage reimbursement in Connecticut?

At the end of the day, mileage reimbursement serves two main purposes. It helps employees like David avoid dipping into their personal funds for business tasks, and it protects you, the employer, from wage disputes and compliance headaches. 

Whether you need a fleet or you don’t, it’s important to be aware of the rules, especially around the minimum wage and workplace injury.

But it’s also interesting to think about, if you have mobility needs for your field teams, using a vehicle reimbursement program to help them do their job best. And it’s good to know you have options like Fixed and Variable Rate reimbursements.