This article explains how Perk calculates mileage expenses—from measuring distance to applying reimbursement rates and tax. Use it to understand the rules that determine what gets paid, when, and how tax is applied automatically.

What a mileage expense is

A mileage expense in Perk lets employees claim reimbursement for journeys made using their personal vehicle for work purposes. Rather than submitting a receipt, the employee enters a start and end location (and any stops along the way), and Perk calculates the distance and the reimbursement amount based on the applicable mileage rate.

Employees can create mileage expenses in two ways:

• Manually: by creating a standalone mileage expense.
• Automatically: when a mileage expense is generated as part of a trip in Perk.

Perk admins can set up multiple mileage rates as required to handle various scenarios such as different reimbursement rates for electric versus combustion vehicles, or for sole drivers versus drivers with additional passengers.

To calculate mileage reimbursements, Perk takes the destination and arrival location (from/to addresses) entered by the employee, assigns the correct mileage rate, and calculates the amount to be expensed by multiplying the distance by the rate per kilometer (mile).

Calculating mileage distance

Perk uses Google Maps to calculate the distance traveled between the locations the employee enters, according to the best/fastest route. The calculated distance is shown in the expense form by clicking Calculate distance. Employees can override it manually if needed—for example, if they took a different route.

There may be differences in Perk mileage calculation compared to Google Maps. Perk uses the most efficient route when calculating the mileage. It does not avoid tolls or highways when calculating the distance. Therefore, there may be a slight variation in the distance calculated with Google Maps due to other factors such as exact or approximate address of the departure and arrival locations, traffic on-route, route complexity, etc.

Note: For greater precision in automatic mileage calculation, enter exact addresses for the departure and arrival locations rather than an approximate location (i.e. Zurich city).

Locations are stored in the mileage claim using the person‘s language. For example, for employees with Perk in German, the location is displayed using the German version of the address. However, the technical location used to calculate the distance is identical.

The route used to calculate the distance is shown on the map. A return journey can be simulated in mileage expenses by selecting the Round trip (double distance) checkbox, which simply doubles the distance calculated between the start and end location.

Note: Employees can automatically calculate mileage in trips by selecting the Calculate mileage claim (to the next stop) checkbox. This automatically creates a mileage expense for the distance between stops.

Compliance in manually entered distances

For auto-calculated distances in mileage expenses and trips, employees can manually override the distance by entering the number of kilometers or miles in the Distance (one way) field. Perk admins can set up a compliance warning to detect any manual entries that exceed the auto-calculated distance by a given percentage.

Perk admins can set a threshold (%) by which manually entered mileage distances may exceed the auto-calculated distance provided by Google Maps in Settings > Account > Companies > Spend settings, Compliance.

The compliance message is only displayed when the person has automatically calculated the distance, either by clicking Calculate distance or selecting the Calculate mileage claims (to next stop) checkbox. If the person enters the distance manually, the message is not displayed.

Set up mileage rates

Mileage rates are set up in Settings > Expense settings > Mileage rates. Only Perk admins can edit mileage rates. Mileage rates can be valid indefinitely or valid for a fixed period (Valid from/to).

Mileage rate types

There are two types of mileage rate that can be used to calculate mileage costs:

• Fixed rate
• Stepped rate

Fixed rate

Fixed mileage rates use a fixed rate per kilometer or mile. The reimbursement is calculated by multiplying the total distance by the fixed rate. 

Example: Sarah drives 80 km on a work trip. Her company's simple mileage rate is £0.45/km. Her reimbursement is 80 × £0.45 = £36.00.

Stepped rate

Stepped mileage rates use a variable rate that depend on how many kilometers or miles the employee has accumulated over the period. Different rate brackets apply to different distance bands, so the rate changes once the employee crosses each threshold.

Example: Alex's company uses a stepped rate: £0.45/km for the first 10,000 km per year, and £0.25/km for any distance beyond that. If Alex has already driven 9,800 km this year and submits a 500 km trip, the first 200 km is reimbursed at £0.45/km and the remaining 300 km at £0.25/km.

How mileage rate eligibility is determined

Perk tracks each employee's accumulated mileage over the period (monthly or annually, depending on your company settings) using a mileage counter. This counter determines which mileage rate applies to each expense.

The eligibility of a mileage rate for a mileage expense is determined by three factors:

• the employee’s mileage counter
• the mileage rate’s minimum number of kilometers
• the mileage rate’s maximum number of kilometers

When employees create a mileage expense, Perk tries to automatically assign the correct mileage rate based on its eligibility. Only rates whose minimum number of kilometers matches the employee’s mileage counter are shown. For example, a Perk admin has set up these mileage rates:

• Mileage rate A: minimum mileage 2000 km
• Mileage rate B: minimum mileage 50000 km

If the employee’s accumulated mileage counter is 20000 km, only mileage rate A is eligible. The maximum mileage determines the cutoff rate after which a mileage rate is no longer eligible for application.

If no minimum or maximum number of kilometer is set in the mileage rate, the mileage rate can be used in all mileage expenses created by the employee.

Where a Perk admin has set up multiple mileage rates with similar minimum and maximum mileage, the order in which the mileage rates are selected can be determined by setting a value in the Mileage rate priority field. The higher the value, the higher the priority the mileage rate has over other eligible mileage rates.

Minimum distance for trips

Your company can set a minimum distance that employees must travel before a mileage expense is automatically created as part of a trip. If the trip distance is below this threshold, no mileage expense is generated for that trip.

Note: If the distance is less than the minimum distance to travel, then the mileage expense is not created in the trip.

Minimum distance for reimbursement

As an alternative to setting up a stepped mileage rate with a zero rate for kilometers (or miles) traveled up to a specific threshold, you can set the minimum distance for reimbursement in each mileage rate in which you indicate to Perk the number of kilometers to be ignored before starting to calculate the reimbursement.

For example, if an employee travels 121.57 km. The company uses a simple mileage rate of 0.16 EUR per kilometer and sets a minimum distance for reimbursement of 100 km.

The calculation for reimbursement is as follows:

• 1st calculation = 100 km * 0 = 0 EUR
• 2nd calculation = 21.57 km * 0.16 EUR/km = 3.45 EUR

Mileage rates by applicable countries

Mileage rates can have a global scope or be country-specific (Applicable countries). By default, rates are applied globally.

You can set up a mileage rate that applies to a specific country only. For trips taken within the country, that mileage rate is applied. For cross-border trips, several mileage rates may be taken. For example, you may want to set up separate mileage rates for Germany, Switzerland, and France.

• Mileage rate 1 (Germany only)
• Mileage rate 2 (Switzerland only)
• Mileage rate 3 (France only)

If an employee takes the following journeys, Perk calculates the applicable mileage rate as follows:

• Munich to Zurich - Mileage rate 1 is applicable
• Zurich to Paris - Mileage rate 2 is applicable
• Zurich to Munich - Mileage rate 2 is applicable
• Paris to Munich - Mileage rate 3 is applicable
• Barcelona to Paris - No mileage | No rate applicable as there is no rate set up for Spain
• Paris to Barcelona - Mileage rate 3 | The journey originated in France
• Lisbon to Barcelona - No mileage | No rate applicable as there is no rate set up for Portugal

VAT in mileage expenses

Perk can automatically calculate the tax (VAT) amount on a mileage expense based on the tax rate linked to the applicable mileage rate. This means employees and finance teams don't need to calculate or enter tax manually.

How VAT is calculated automatically

When an admin sets up a mileage rate, they can link one or more tax rates to it. Once linked, Perk automatically applies those tax rates to any mileage expense that uses that rate—whether the expense is created manually by the employee or generated automatically as part of a trip.

The tax amount is calculated as: Reimbursement amount × tax rate = tax amount

When an employee creates or views a mileage expense, the mileage expense shows the pre-calculated tax amount alongside the reimbursement amount. Employees can’t enter or adjust the tax figure themselves. If they change the distance on a mileage expense, Perk automatically recalculates the tax amount to match the updated reimbursement. The tax always reflects the current distance entered.

If there is no tax rate associated with the mileage rate, then employees can select a tax rate manually (if displayed) and edit the reimbursement amount.

Stepped mileage rates and tax at export

For stepped mileage rates, the tax shown on the expense form during submission and review is an estimate based on the distance entered at that point. Because the final reimbursement for stepped rates depends on the employee's total accumulated mileage for the period—which may change as more expenses are submitted—the definitive tax calculation is done at the time of export.

This means the tax amount on an exported stepped mileage expense may differ slightly from the amount shown at submission or review time. This is expected behavior, and it ensures the tax figure is always accurate based on the final reimbursement amount.

Note: Tax is only calculated automatically when a tax rate is linked to the mileage rate. If no tax rate is linked, the tax amount field on the expense is empty.

Mileage analytics

Perk tracks mileage data across your organization, giving finance teams visibility into how much employees are driving and what's being reimbursed. 

You can view mileage expense data in the analytics section of Perk alongside other expense categories.

To generate a mileage report:

1. Choose the filter criteria and the row data you want to see, and select Travelled distance (Mileage) in the Values (aggregated) dropdown field:
2. Press Generate Report. 
3. You can download the generated report by clicking the report link displayed in the Results section.