Business-Use Percentage
Quick definition
Business-use percentage is the share of a vehicle’s total mileage driven for work.
Full definition
Business-use percentage compares the miles a vehicle is driven for business with its total mileage, including personal trips. It is calculated by dividing business miles by total miles and multiplying by 100.
For example, 10,000 business miles out of 20,000 total miles equals 50% business use.
In FAVR calculations, employers use projected annual mileage to determine this percentage. It helps calculate the business share of ownership costs covered by fixed payments. The percentage used for FAVR cannot exceed 75%.
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