How to Calculate Mileage with Drive

When it comes to expense management, accurate mileage calculations are a top priority. Everyone wants to be on the right side of the law, so precise calculations must be part of your business model.

You may want to calculate mileage traveled for your employer or for tax purposes. Either way, there are several methods that can help you.

What are the main ways to calculate business mileage?

Most mileage calculations fall into four common approaches: a standard rate, actual expenses, GPS tracking (apps/devices), or manual odometer readings. The best option depends on how detailed you want your records to be and how you prefer to capture trips.

Standard rate

The standard mileage rate is mandated every year. This rate is used to determine the mileage rate for business purposes.

It already considers operating costs, depreciation, and maintenance. Standard rate is the most commonly used method because it is often the easiest.

Actual expense method

The actual expense method requires calculating the actual costs of using your vehicle for business needs, taking fuel, insurance, maintenance, and depreciation into account.

This option is more complicated than some of the other methods because it relies on tracking real vehicle costs.

GPS apps (including Drive)

Smartphone apps, like Drive, and GPS devices track and calculate mileage using GPS technology. This method is easy to use and also accurate.

With our Drive app, you can automatically upload to Concur Expense, streamlining the mileage reimbursement process.

Good ol’ odometer

A long-standing manual approach is to record odometer readings at the start and end of a trip, then use subtraction to calculate total kilometres driven. Many people still use this method.

A note of caution: this method is riskier because it’s prone to human error. As simple as it is, it’s not always the most accurate.

How do you calculate mileage reimbursement?

It’s reasonably straightforward to calculate your mileage as long as you keep good records and use the right reimbursement rate. If you prefer manual mileage capture, the Drive app can help you there, too, and you can switch between manual and automatic methods.

Step 1 — Keep business mileage records

Detailed records make it easier to calculate miles traveled and provide proof if your employer requires it. You can rack up miles by driving to client meetings, running business errands, or making site visits.

Any time you must drive to complete some aspect of your job, you should calculate the miles. No matter where you’re travelling, the Drive app supports you and measures kilometers or miles worldwide.

Step 2 — Know the reimbursement rate

Mileage rates are set each year, but the rate your company uses may differ. Always check with your organisation to verify their reimbursement rate.

While the rate they use should be based on the one set by the ATO, organisations may choose a different rate for various reasons—for example, some may pay less than the ATO rate to save money.

Step 3 — Calculate the reimbursement amount

Use this formula to calculate reimbursement:

(total miles for business) × (the reimbursement rate) = reimbursement amount

Example: Say this year you drove 600 kilometres for work purposes and the reimbursement rate is 65.5 cents.
600 × $0.655 = $393.00

Step 4 — Consider other factors that may affect your rate

Other factors can impact the rate you receive. If you use your own vehicle, your reimbursement rate is higher.

If your business provides a vehicle, the rate they allow you to use may be lower. With Drive, you can set parameters to help calculate your miles accurately.

Step 5 — Submit the report

Your employer likely has a specific expense report format. Follow their process and provide all requested information.

Details should include trip information, kilometres driven, and the reimbursement amount. Keep a copy of all records.

Best practices for accurate mileage calculation

To calculate mileage correctly for tax purposes or employee reimbursement, focus on accuracy, detail, and consistency. These tips can help you follow regulations and reduce errors.

• Record mileage accurately and immediately (don’t rely on memory). Using the Drive app provides a reliable way to track mileage.
• Keep records detailed and accurate, including:
  • miles/kilometres
  • starting point and destination
  • date
  • purpose of the trip
• Review your records and verify accuracy to catch errors. Use a mileage reimbursement calculator to confirm your numbers.
• For employee reimbursement, clearly separate business travel vs. personal travel.
• Follow your company’s best practices for how to calculate car allowance for employees for proper employee reimbursement.
• Use consistent, reliable methods to track and calculate your data.
• Verify mileage with map applications to confirm route distances.

FAQs

1) What are the main methods for calculating mileage?

The page describes four options: standard rate, actual expense method, GPS apps/devices (like Drive), and manual odometer readings.

2) How do GPS apps like Drive calculate mileage?

Apps like Drive track and calculate mileage using GPS technology, which is described as easy to use and accurate.

3) What is the mileage reimbursement formula?

(total miles for business) × (the reimbursement rate) = reimbursement amount.

4) Why should I confirm my organisation’s reimbursement rate?

Even though mileage rates are set each year, your company may use a different rate. The page notes that an organisation’s rate should be based on the ATO rate, but it may differ (for example, some organisations may pay less to save money).

5) What details should be included when submitting a mileage expense report?

Include trip details, kilometres driven, and the reimbursement amount, and keep copies of your records.