What is CPM?

Cents per mile (CPM) is a reimbursement program designed for drivers who occasionally use their personal vehicle for work (less than 5,000 miles per year). It’s designed to fully reimburse drivers for every work-related mile driven, and can be tax-free.

The mileage reimbursement rate you receive is set by your employer. It’s calculated on a per-mile basis and covers both fixed and variable rates. 

“Fixed” rates add up regardless of how often you drive your car, while “variable” rates depend on your driving frequency and mileage. Your fixed rate reimbursements are a set amount that will not change, and your variable rate reimbursements will change from month to month.

Fixed Expenses Variable Expenses
  • Depreciation 
  • Personal property taxes
  • Auto Insurance
  • Vehicle license and registration fees
  • Fuel
  • Oil
  • Tires
  • Maintenance 

CPM and taxes

The CPM reimbursement rate is based on the IRS standard mileage rate, which changes from year to year. If the CPM reimbursement rate is higher than the IRS standard mileage rate, the overage will be taxed. Nearly every reimbursement payment is tax-free, and even when overage is taxed, CPM is still incredibly tax-efficient. This is because you only pay taxes on the overage, not the entire reimbursement.