When it comes to paying for mileage lot of companies seem to slavishly follow the Revenue mileage rates. Why?
These rates are designed for the Civil Service and public bodies.
There is no legal requirement for a private company to pay the same rates, or more importantly, to pay the same rates per kilometre across the different mileage thresholds.
Do not get me wrong, I am not advocating the denial of equal rates for private sector employees.
I am suggesting a way to pay for mileage to all employees on an equitable basis and at the same time save the company a significant amount of money.
The way to do this is to introduce a single mileage rate, of say 41 cents, for every employee regardless of kilometres driven.
Why should low mileage employees get more money than high mileage ones?
If you adhere to the Revenue rates, an employee who has mileage of 4,000km per annum will cost you Euro 2,772.00.
If you had a single rate of 41 cents per kilometre, this same employee would cost you Euro 1,640.00.
A saving of Euro 1,132.00 per low mileage employee per annum. The maths is easy.
This single rate when extrapolated across your high mileage employees will result in them getting, more or less, exactly what they would have received under the Revenue system but, more importantly for them, give them an even mileage payment throughout the year.
Revenue do not care what mileage rates you pay unless they are higher than theirs.
Trust me, this works.