There are several people employed by the Federal Government who have to use a vehicle to perform their duties. As long as a specialty vehicle isn’t required, many have the option to use their own car or van. Even mail carriers for the USPS, especially in rural areas, might be required to use their own automobile- or at least have a choice. When a Federal employee uses his or her car to perform their duties for the country’s civil service, they can get reimbursed for gas and mileage.
In 2018, the rate per mile was $0.545. Then the next year, that rate jumped to $0.58. Any easy way to think about it is to multiply by 100. 2 years ago, the government reimbursed these workers about $54.50 for every 100 miles. Last year, it was $58 per 100 miles- a solid $3.50 spike. Now for 2020, the General Services Administration (GSA) has slightly backpedaled those mileage reimbursement rates to $0.575 for every mile ($57.50 per 100.)
To see how this can impact some feds, let’s look at an example where the car being utilized gets 20 miles per gallon and a gallon is on average $2.50 over two years:
Our hypothetical Fed, who we will call ‘Ted,’ drives 10,000 miles that are eligible for reimbursement from the government in 2019. This works out to exactly 500 gallons of gas that Ted can get cash back for. The fuel cost him roughly $1,250 and he will receive around $5,800 back. Fast forward to 2020 to look at the same scenario: 10,000 miles x $0.575 = $5,750. So, Ted gets about $50 less than he did in 2019.
Here are the other 2020 reimbursement rates released by the GSA:
Automobile (when Government Vehicle is Available): $0.17/mile
If Ted had been able to use a Government car but still chose to use his own, the rate of reimbursement would be much lower. Instead of receiving $5,750 back, it would be closer to $1,700.
Until Next Time,
**Written by Benjamin Derge, Financial Planner. The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Benjamin Derge and not necessarily those of RJFS or Raymond James. Links are being provided for information purposes only. Expressions of opinion are as of this date and are subject to change without notice. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.
Gas Mileage Reimbursement Rates – GSA Mileage