Mileage rates in Mexico
In Mexico, employers can reimburse their employees for using personal vehicles during business-related trips. A prime illustration of such a trip is when an employee drives to a client’s office for a scheduled visit.
To ensure compliance with tax regulations, there exists a predefined maximum allowable reimbursement rate per kilometre, which can be provided to employees without incurring taxation implications. This specific rate is outlined in Article 58 of the Regulation of the Income Tax Law (Ley del Impuesto Sobre la Renta) and is set at MXN 0.93 per kilometer. Additionally, it’s important to note that the total mileage eligible for tax-free reimbursement cannot exceed 25,000 kilometres per year, and all business journeys must occur within the national borders of Mexico.
While it is permissible to compensate employees beyond these stipulated maximums, any amount surpassing them will be subject to taxation as part of the employee’s income. Conversely, if the reimbursement falls below these predefined amounts, it remains exempt from taxation.
Learn how you can apply these mileage rates in your Rydoo account here.