On December 22, 2020, the IRS announced the updated mileage rates for 2021 to be used in connection with calculating the costs of operating a personal vehicle.

Beginning on January 1, 2021, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be 56 cents per mile driven for business use, down 1.5 cents from the rate for 2020.

California Labor Code section 2802 requires an employer to reimburse an employee for all business-related expenses, including the use of an employee’s personal vehicle for work-related activities.

Employers should be sure to update their practices accordingly.