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Can you give me some guidelines on mileage and subsistence rates I should pay my employees?

Overview

The Revenue have changed the mileage and subsistence rates from 1st of April 2017.

You can pay your employee’s expenses when they travel on business journeys. You can also pay subsistence if employees are working away from their normal place of work. You can repay your employees when they use their private cars, motorcycles or bicycles for business purposes.

A common mistake that sole traders make is to claim mileage and subsistence using Civil Service Rates.  They can only claim for the actual expenses they incur so if you are a sole trader, you should keep receipts for the business portion of motor expenses (Fuel, motor tax, motor insurance) hotels and related expenses.

Reimbursement rates

Use of private vehicles

You can repay your employees when they use their private cars, motorcycles or bicycles for business purposes. This payment can be made, tax free, by the amount of business kilometers travelled.

You can either:

  • Use the current schedule of Civil Service rates
  • Use other rates not higher than Civil Service rates
  • Repay the actual cost of the travel to your employee. This amount should not exceed the current Civil Service rates.
  • Your employee may make a claim to Revenue for any travel expenses that are not repaid by you. They should use the car expenses claim form.

Subsistence expenses

You may repay your employee expenses for their subsistence costs while they are temporarily away from their normal place of work.

Payments can be made by either:

  • Using the current schedule of Civil Service subsistence rates
  • Repaying the actual cost of subsistence, at a rate not higher than the current Civil Service rates

The current Civil Service Rates are:

Motor Travel Rates per kilometer
Distance Bands Engine Capacity up to 1200cc Engine Capacity 1201cc to 1500cc Engine Capacity 1501cc and over
Band 1 0 – 1,500km 37.95 cent 39.86 cent 44.79 cent
Band 2 1,501 – 5,500 km 70.00 cent 73.21 cent 83.53 cent
Band 3 5,501 – 25,000 km 27.55 cent 29.03 cent 32.21 cent
Band 4 25,001 km and over 21.36 cent 22.23 cent 25.85 cent

 

Reduced Motor Travel Rates per kilometer
Engine Capacity up to 1200cc Engine Capacity 1201cc to 1500cc Engine Capacity 1501cc and over
16.59 cent 17.63 cent 18.97 cent

Current Subsistence Rates (applying from 1 April 2017) are:

Night Allowance Day Allowance
Normal Rate Reduced Rate Detention Rate 10 hours or more 5 hours but less than 10 hours
€133.73 €120.36 €66.87 €33.61 €14.01

Overnight allowance

Overnight allowance covers an overnight absence of up to 24 hours. This must be at least 100km from the employee's home and their normal place of work.

Day allowances

There are two categories, five to ten hours and over ten hours absence. The absence must be outside eight kilometers of the employee's home or normal place of work (five kilometers prior to 1 July 2015).

  • Domestic day subsistence rates (from 1 July 2015)
  • Domestic day subsistence rates
  • Ten hours or more    €33.61
  • Between five and ten hours  €14.01

The Revenue Commissioners are always reviewing mileage and subsistence claims so make sure your expense claims and records will withstand detailed Revenue scrutiny. If they don’t it could cost you!

For further information on the revenue guidelines on travel & Subsistence go to www.revenue.ie or contact Kevin O’Donnell at RDA on 053 9170507 or email kodonnell@rda.ie.