FMCSA Compliance: Mileage Reimbursement Considerations

The Federal Motor Carrier Safety Administration (FMCSA) is a regulatory body that makes the rules around how commercial vehicles must operate in the United States. While it doesn’t directly mandate how much businesses have to pay employees for their mileage, the FMCSA may naturally influence the required costs associated with driving. These costs affect how employers structure mileage reimbursements for their non-commercial drivers. 

Understanding the FMCSA's Role

The FMCSA is a division of the U.S. Department of Transportation with the goal of reducing crashes, injuries, and fatalities involving large trucks and buses. It governs almost every aspect of commercial motor vehicle (CMV) operation, including required driver qualifications, vehicle safety standards, and hours-of-service regulations.

Key areas of FMCSA oversight include licensing and driver medical fitness, service hour rules to prevent fatigue, vehicle maintenance and upkeep, insurance minimums for carriers, and hazardous materials transportation rules.

These safety laws ensure the industry operates correctly and protects the general public from road risks. 

Again, the focus here is commercial drivers. Mileage reimbursement, however, applies to the use of personal vehicles, which are not classified as commercial. 

Mileage Reimbursement: A Broader Context

In general American practice, mileage reimbursement refers to employers paying employees or contractors for using personal vehicles for work-related driving. Every year, the IRS releases a standard mileage rate, $0.70/mile in 2025, which is designed to cover typically incurred costs like fuel, wear and tear, insurance, and depreciation.

However, employers may use better-fitting alternative reimbursement models for their higher mileage employees such as Fixed and Variable Rate (FAVR) programs, Tax-Free Car Allowances (TFCA), or actual expense reimbursement. Each method has different tax rules and administrative requirements for ensuring compliance with IRS standards.

In some states, reimbursement is actually optional unless required by specific employment contracts. In other states, like California, reimbursement is non-negotiable. However, for carriers operating under FMCSA jurisdiction, reimbursement is not just about tax efficiency; it’s tied to regulatory compliance and operational economics.

Importantly, FMCSA regulations don’t apply to personal vehicle reimbursement programs. This makes personal-use reimbursement models such as FAVR, CPM, and TFCA especially attractive as complementary or alternative options to traditional company-fleet programs. These models offer flexibility and simplicity while avoiding the burden required for traditional commercial vehicle management.

What the FMCSA Does Not Do

To clarify, the FMCSA does not set reimbursement rates for personal vehicles, require employers to pay a minimum per-mile reimbursement, or dictate tax treatment of reimbursements. The IRS does this. 

FMCA Does Not Regulate Mileage Reimbursement

Because FMCSA regulations don’t govern personal vehicles or reimbursement models like FAVR, CPM, and TFCA, these options offer businesses a compelling alternative for non-commercial vehicles. They provide a flexible, compliant, and often a more cost-effective approach to enabling vehicle use for business without incurring the administrative and financial burdens associated with FMCSA compliance, where not relevant.

As businesses seek cost-effective and compliant reimbursement programs, understanding the FMCSA’s indirect impact can be helpful. Thoughtful vehicle program design can align operational safety with fair workforce enablement practices, ensuring both compliance and long-term scalability.

Disclaimer: Nothing in this blog post is legal, accounting, or insurance advice. Consult your lawyer, accountant, or insurance agent, and do not rely on the information contained herein for any business or personal financial or legal decision-making. While we strive to be as reliable as possible, we are neither lawyers nor accountants nor agents. For several citations of IRS publications on which we base our blog content ideas, please always consult this article: https://www.cardata.co/blog/irs-rules-for-mileage-reimbursements. For Cardata’s terms of service, go here: https://www.cardata.co/terms.