The Cost of Gas is Going Down…So Should Your Reimbursement Rate

While gas prices have continually dropped over the past couple of months, your mileage reimbursement most likely hasn’t. We haven’t seen gas prices this low in over 5 years and were in a state of accepting continued increases, topping out at over $4 per gallon in some areas.

But with the consistent decline, and eventual bottoming out of prices, we can expect a period in which gas prices will remain low.  For this reason, you must look at your mileage reimbursement rate immediately.

If you are paying the IRS rate for mileage reimbursement, you are overpaying.  If you are paying anything close to 40 cents or more, you are now overpaying.  The 2015 IRS mileage rate has increased to 57.5 cents a mile.  But as gas prices continue to drop to below $2 a gallon in many areas, with other areas getting close to $2 a gallon, your rate and the IRS rate are too high!

Bring some of the money back to your agency by reducing reimbursement rates to 30-35 cents per mile.  If the average clinician travels 500 miles in one week, and you reimburse at the IRS rate of 57.5 cents per mile, the weekly cost is $287.50. But if you reduce that rate to 33 cents per mile, the reimbursement decreases to $165 – SAVING your agency $122.50 for just one clinician.  Now multiply that savings by 10, 20, 40, or 50 clinicians and your weekly savings is huge!  Then for fun, just annualize that savings and see how much money your agency would save.

The best way to see your overall savings is to set up a spreadsheet with different rates and the average mileage reimbursement per clinician.  You can obtain the mileage reimbursement from your payroll records or accounts payable reimbursement records, depending on how you pay your staff for mileage.  If you would like an Excel template to measure your current vs. potential savings, send an email to