Brazilian labour legislation does not mandate mileage reimbursement, so companies are not obligated to provide it. However, employers often compensate employees who use their vehicles for work. One of the most used methods is reimbursing mileage at a rate per kilometre. This rate covers gas and other expenses such as oil, tyres, registration taxes, car insurance, maintenance, tolls, parking, and vehicle depreciation.
In Brazil, mileage reimbursement is in principle not considered taxable income, as confirmed by case law. Brazil does not impose a maximum tax-free limit on this reimbursement, giving employers the freedom to set their own rates.
Employers typically determine these rates by considering the average fuel consumption and cost, ensuring they remain reasonable. The disproportion should not be so great that it could be characterised as disguised remuneration.