A fuel reimbursement is a situation in which an entity covers the cost of fuel used by an individual in carrying out tasks on behalf of that entity. The term is sometimes used in conjunction with a mileage reimbursement, although the two forms of reimbursing employee expenses is a little different. The process to receive a fuel reimbursement varies based on company policies and governmental regulations, although there are a few basics that tend to apply in every situation.
While a mileage reimbursement and a fuel reimbursement are very similar, there is one key difference. The former typically reimburses an employee based on the distance traveled on behalf of his or her employer when using his or her own vehicle, with a fixed rate applied to each mile traveled. In contrast, a reimbursement related to fuel consumption is associated with the use of a company-owned or a rented vehicle, and normally repays the employee for the amount of gasoline purchased and consumed during that business trip.
In order to apply for a fuel reimbursement, many companies require that the employee submit a request for the reimbursement. Forms of this type normally include fields to enter basic data such as the name of the employee, the purpose for the trip, and information regarding when gasoline was purchased during that trip. The form will often call for the name of the establishment in which the gasoline was purchased, and the cost of the fuel. Along with the request form, most companies require that a receipt obtained at the time of purchase also be attached to the document as proof that the transaction actually took place on the date and time claimed. Assuming the documentation is in proper order, the request will be approved and the employee reimbursed for the purchase of fuel according to the terms and policies of the employer.
Both mileage and fuel reimbursement are considered part of typical business traveling expenses. Which approach is appropriate depends on exactly how the trip was made. In some countries, an employee who chooses to drive his or her own vehicle for a business trip is entitled to a specific mileage reimbursement rate that is understood to cover not only the cost of the fuel, but also allow for the wear and tear on the employee’s vehicle. The amount of that mileage allowance will vary based on government-approved calculations that are adjusted regularly based on the state of the general economy. Should the travel involve leasing or renting a vehicle, the employee is usually not paid based on mileage, but is free to submit a fuel reimbursement request for any gasoline purchased while using the car during the business trip.
