Cents per Mile (CPM)

A cents per mile (CPM) program is a simple, tax-free reimbursement program that employers can use to compensate their employees who drive for work. On a CPM program, employers pay drivers a flat rate for each business mile they drive. This is generally a good fit for low mileage drivers. 

Most cents per mile programs are paid at the IRS standard rate, a safe harbor mileage rate provided by the IRS. The standard rate is typically updated annually, but may be updated more frequently to reflect changes in the cost of driving. In 2023, the current standard rate is 65.5 cents per mile. Any CPM rate paid to drivers is tax-free as long as it does not exceed this amount. 

Unlike FAVR programs, CPM programs have very few compliance requirements for drivers. But since CPM programs are a type of accountable allowance, drivers do need to maintain compliant mileage logs to participate. 

Find out more about CPM mileage reimbursements, including their advantages and disadvantages, or read about how CPM compares to FAVR programs. Consider outsourcing your CPM program to a vehicle reimbursement specialist software provider like Cardata, which can help reduce administrative burden. To learn about whether CPM is a good fit for your business and more about Cardata, talk to a Cardata expert.