Mileage Reimbursement vs Actual Cost Calculator
Whether your mileage allowance covers your real cost.
Compare per-mile reimbursement against the real cost of business driving including fuel, wear, and depreciation. Educational tool, no signup required.
What this tool does
Employer mileage rates are sometimes generous, sometimes not. Enter the per-mile reimbursement, your real per-mile cost (fuel, maintenance, wear), and annual business miles. The tool shows surplus or shortfall.
Enter Values
Formula Used
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Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
If you're reimbursed 0.45 per mile and your real cost is 0.32 per mile, 8,000 business miles produce a 1,040 surplus. If real cost exceeds reimbursement, you're effectively subsidising the employer — worth raising at salary review.
What the result means
A positive figure means the allowance covers more than actual cost. Negative means you're out of pocket. Use the result to decide whether to push for a upper rate or use a company car instead.
Quick example
With reimbursement per mile of 0.45 and real cost per mile of 0.32 (plus annual business miles of 8,000), the result is 1,040.00. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.
Which inputs matter most
You enter Reimbursement Per Mile, Real Cost Per Mile, and Annual Business Miles. Two inputs usually tip the answer one way or the other. Identify which ones matter most by flipping each value past a round threshold and watching whether the winning option changes.
What's happening under the hood
Net surplus is reimbursement rate minus real cost rate, times annual business miles. Real cost should include fuel, maintenance, tyres, and a share of fixed costs (insurance, depreciation). The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.
When to actually change the habit
Most lifestyle spending delivers real value. The exceptions are the ones that stopped delivering months ago but got auto-renewed anyway, and the ones chosen out of defaults rather than preference. Run this, then audit for those two categories — that's where the easy wins live.
What this doesn't capture
The tool prices the money; it can't weigh the enjoyment. A coffee habit, gym membership, or streaming bundle might cost what the math says but deliver value that's harder to quantify. Use the number to make the trade-off visible — the decision is yours.
Your annual mileage surplus or shortfall is the figure shown above.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
Net surplus is reimbursement rate minus real cost rate, times annual business miles. Real cost should include fuel, maintenance, tyres, and a share of fixed costs (insurance, depreciation).
References
Frequently Asked Questions
What's a real per-mile cost?
What about tax?
If I'm losing money?
Multiple cars?
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