Illinois Mileage Reimbursement Law: Rates, Deadlines, and Policy

Under the Illinois mileage reimbursement law, your employer must pay you back for miles you drive in your personal vehicle for work. The rule sits in Section 9.5 of the Illinois Wage Payment and Collection Act (IWPCA), which took effect January 1, 2019, and it treats unreimbursed mileage the same as unpaid wages.¹ If your employer stiffs you on driving costs, the same penalty machinery that applies to a missed paycheck kicks in.

The statute covers “necessary expenditures” that are reasonable, incurred while doing your job, and that primarily benefit the employer rather than you. Mileage for client visits, deliveries, trips between job sites, and any driving the employer authorized or required is squarely within that definition. What the law does not cover: losses from your own negligence, normal wear and tear, theft of your vehicle (unless the employer’s negligence contributed to it), and any driving the employer never authorized or required.¹

Which Miles Count

The line that trips people up is commute versus business travel. Driving from home to your regular workplace and back is commuting, and no Illinois or federal law makes your employer pay for it. Business mileage starts once you leave your regular workplace to go somewhere for work, or when you travel between two work locations in the same day.²

Common situations that qualify:

Driving from one client or job site to another during the workday.
Leaving your normal workplace to meet a client, attend a training, or visit a vendor.
Driving from home to a temporary work location that isn’t your regular workplace, depending on the circumstances.

Personal detours don’t convert into work miles. If you swing 15 miles out of the way for lunch between two clients, the extra distance is on you.

How Much Per Mile

Illinois law does not set a specific per-mile rate. Most employers use the IRS standard mileage rate, which is built to cover fuel, insurance, depreciation, and maintenance. For 2026 that rate is 72.5 cents per mile, and it applies the same to gas, diesel, hybrid, and electric vehicles.³

Employers can pick a different rate, but there’s a floor. The statute prohibits policies that provide “no reimbursement or de minimis reimbursement.”¹ Ten cents a mile when the IRS rate sits at 72.5 would be difficult to defend as reasonable. Employers can also reimburse actual costs, such as fuel, insurance, repairs, and depreciation, instead of a flat per-mile figure. Either method is legal so long as the total reasonably covers what you actually spent.

Deadlines and Documentation

You have to hold up your end. Submit each claim with appropriate documentation within 30 calendar days of the expense, unless the employer’s written policy gives you longer.¹ Miss the window and the employer owes you nothing.

Good documentation means recording each trip: date, starting point, destination, business purpose, and miles driven. A tracking app takes most of the friction out. If you lose a receipt or your log has a gap, the statute lets you submit a signed statement explaining the missing documentation, and your employer has to accept that in place of the original record.

The Written Policy Matters

Whether your employer has a written expense reimbursement policy changes the entire dispute. If there’s a written policy and you didn’t follow it, the employer isn’t liable for the expense.¹ If there’s no written policy, the employer loses that defense.

A functional policy typically spells out which expenses qualify, the reimbursement rate, what documentation to submit, the submission deadline (30 days by default, longer if the policy says so), and the process for missing receipts. Before you submit or dispute a claim, ask for the policy in writing and read it.

How the Reimbursement Is Taxed

If the employer runs an “accountable plan,” your mileage reimbursement is not income. It stays off your W-2 and out of income tax and payroll tax withholding.⁴ An accountable plan requires three things: a business connection to the expense, substantiation to the employer within 60 days, and return of any amount that exceeds the substantiated expense within 120 days.²

Fail any of the three and the entire arrangement becomes a “non-accountable plan.” The reimbursement is then reported as wages on your W-2 and hit with income tax and payroll taxes.⁴ Reimbursement above the IRS rate has a similar problem: the excess is taxable unless the employer can show actual costs justify it. Practical check: if your mileage payment shows up on your W-2 as wages, the plan probably isn’t accountable, and you’re paying tax on money that should have been tax-free.

What It Costs an Employer to Ignore This

The IWPCA treats unreimbursed expenses like unpaid wages, and the penalty stack is serious.

The unpaid amount plus 5% of that amount for every month it remains unpaid, with no cap.⁵
A non-waivable administrative fee to the Illinois Department of Labor if it issues a demand or order: $500 for amounts up to $3,000, $750 for amounts between $3,000 and $10,000, and $1,250 for amounts of $10,000 or more.⁵
Additional penalties for ignoring a Department order: 20% of the underpayment to the Department plus 1% per day of the underpayment to the employee, accruing without limit until paid.⁶
Criminal exposure: willfully refusing to pay when able is a Class B misdemeanor for amounts of $5,000 or less and a Class A misdemeanor above that, with a second violation within two years charged as a Class 4 felony.⁵
Personal liability for corporate officers and agents who knowingly permit the violation.⁶

Made concrete: an employer who owes $1,000 in mileage and ignores it for four months faces the $1,000 plus $200 in monthly damages, plus a $500 administrative fee if the Department steps in. Stalling after a Department order pushes the number higher.

You Can’t Be Punished for Asking

Retaliation for raising a mileage claim is a Class C misdemeanor under the IWPCA, and an employee who is fired, demoted, has hours cut, or otherwise punished for filing a complaint, cooperating with an investigation, or testifying in a proceeding under the Act can pursue reinstatement, back pay, and other legal and equitable relief.⁵ Federal law adds a second layer through the FLSA, and that protection applies even if your belief about a violation turns out to be wrong.⁷

How To File a Complaint

If your employer refuses to reimburse, you can either file with the Illinois Department of Labor or sue in civil court, but not both at the same time.⁵ Civil suits let you recover attorney’s fees on top of the underpayment and damages, which makes them viable for larger claims. The Department route has no filing fee and doesn’t require an attorney, though it can take several months.

Before filing, pull together your mileage logs, the employer’s written policy if one exists, communications about the denied reimbursement, and pay stubs showing your regular wages. Complaints can be submitted online through the Department’s website (you’ll need an Illinois ID account), by email to DOL.Wages@Illinois.gov, or by mail to the Department’s Chicago office.⁸

You have time. IWPCA claims carry a 10-year statute of limitations, longer than most employment law deadlines.⁹ Waiting years makes evidence harder to assemble, so the sooner you file, the stronger the claim.

1
Illinois General Assembly. 820 ILCS 115/9.5 – Reimbursement of Employee Expenses
2
Internal Revenue Service. Publication 463, Travel, Gift, and Car Expenses
3
Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents per Mile, Up 2.5 Cents
4
eCFR. 26 CFR 1.62-2 – Reimbursements and Other Expense Allowance Arrangements
5
Illinois General Assembly. 820 ILCS 115/14 – Penalties
6
Illinois Department of Labor. Wage Payment and Collection Act Penalties
7
U.S. Department of Labor. FAB 2022-2 – Protecting Workers from Retaliation
8
Illinois Department of Labor. File a Workplace Complaint
9
Illinois General Assembly. 735 ILCS 5/13-206