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26-250
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251-1000+
251-1000+
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Fixed and Variable Rate (FAVR) Reimbursement

FAVR is an employee mileage reimbursement method that helps companies save money while providing accurate, tax-free reimbursements to employees.
‍
TripLog offers FAVR for as little as $19/user/mo. See pricing

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TripLog's Fixed and Variable Rate (FAVR) hero banner image

How FAVR can lower reimbursement costs

Cents-per-mile (CPM) reimbursement pays each driver one rate for every mile, determined via a national average of driving costs.

FAVR is an IRS program that takes those same driving costs and breaks them into a fixed-monthly payment and a variable per-mile rate, using vehicle and location-based cost data to make reimbursements more precise.

FAVR breakdown:

Fixed payment

Paid every month, regardless of miles driven.

Depreciation
Insurance
Taxes
Registration

Variable payment

Per-mile rate paid for miles driven for work.

Gas
Maintenance
Tires
Compare mileage programs:
Programs
Mileage reimbursement /mo
CPM
IRS rate
$0.76 x 2,000mi
Monthly reimbursement
=
$1,520.00
VS
FAVR
Fixed
$412
+
Variable
$0.21 x 2,000mi
Monthly reimbursement
=
$832.00
CPM
FAVR
2,000 business miles/mo
See why companies choose FAVR
Fleet to FAVR
CPM to FAVR
Car allowance to FAVR

Fleet programs give companies more direct control over their vehicles, but they also bring significant costs, liability, and administrative work. For companies without specialized vehicle needs, FAVR is the best fit for reducing costs and risk. Get your custom cost-saving analysis.

Ideal program fit

Fleet

vs

FAVR

Insurance liability

Fleet places more accident and insurance risk on the business. FAVR shifts that responsibility to employees, reducing company liability.

Fit

Operational costs

Fleet puts all vehicle costs on the company. FAVR shares operational costs with employees while providing them with fair, tax-free reimbursements.

Fit

Capital commitment

FAVR shifts ownership to employees, scales up or down with your workforce, and improves cash flow. Owned or leased vehicles will lock up company capital.

Fit

Vehicle downtime

Fleet vehicles accumulate costs even when they’re idle, unassigned, or out of service. FAVR provides predictable costs that adjust with demand.

Fit

Administrative hours

Fleet programs require handling purchasing, maintenance, insurance, registration, assignments, and disposal. FAVR eliminates that workload.

Fit

Specialty vehicle

Fleet is the stronger fit for companies that need branded, modified, refrigerated, or otherwise specialized vehicles.

Fit

Cents-per-mile (CPM) reimbursement pays employees at a set mileage rate, making it a simple solution for low-mileage drivers. As mileage increases, FAVR becomes more cost-effective, though the exact tipping point can vary depending on your program’s setup.

Driver Reimbursement ($)
FAVR req. 5+ drivers at 5K+ mi/driver
FAVR
CPM
Tipping point
Business Miles Driven

Choose CPM

Best for low-mileage drivers and small teams.

Consider FAVR

As mileage increases, FAVR becomes more cost-effective, while keeping payments tax-free.

Choose FAVR

The fairest, most cost-effective choice for high-mileage teams.

Reimbursement rises with business miles driven under both methods. Cost per mile pays more at low mileage. The two methods cross at a tipping point, beyond which a fixed and variable rate plan pays more and costs less. FAVR requires at least five drivers averaging 5,000 or more business miles each.

Car allowances are simple, but most programs are taxable and virtually never reimburse drivers fairly. FAVR replaces the guesswork with fair, tax-free reimbursements based on local costs and actual business miles driven.

Drivers

Car allowance payment

Miles

FAVR payment

The difference

Alex S.

1,000 mi

Car allowance payment

$1,000

Miles

1,000 mi

FAVR payment

$520

The difference

$480

Overpaid

Dillan R.

1,500 mi

Car allowance payment

$1,000

Miles

1,500 mi

FAVR payment

$780

The difference

$220

Overpaid

Jessica W.

3,000 mi

Car allowance payment

$1,000

Miles

3,000 mi

FAVR payment

$1,560

The difference

-$560

Underpaid

See what FAVR could look like for your team

TripLog can help you evaluate your mileage program, identify which drivers may be a fit for FAVR, and get the right setup in place.

Talk to us about FAVR
Talk to us about FAVR

Multiple programs, one platform

FAVR or CPM? Most companies need both.

Most companies don't have one type of driver. Some employees drive occasionally, while others cover thousands of miles every month. Some teams use mid-sized sedans, while others need heavy-duty trucks.

TripLog helps you group drivers by mileage, role, location, and vehicle type, then assign the reimbursement program that fits each group best.

Program 1: CPM

+65

Avg. 3,100 mi/yr

Program vehicle: Not applicable

Program 2: FAVR

+65

Avg. 15,000 mi/yr

Program vehicle: Midsize sedan

Program 3: FAVR

+65

Avg. 25,000 mi/yr

Program vehicle: Fullsize truck

Sample company’s program setup
Why location matters
Is your reimbursement actually fair?
CPM uses one national rate, no matter where employees live or drive. FAVR provides more accurate reimbursements based on location, mileage, and vehicle costs, so each driver’s payment better reflects their actual cost of driving.
Driver location
Cost of driving
Miles driven/mo
CPM payment
FAVR payment
New York, NY
High
1,000 mi
$760Underpaid
$872Fair payment
Dallas, TX
Medium
1,000 mi
$760Overpaid
$568Fair payment
Mobile, AL
Low
1,000 mi
$760Overpaid
$463Fair payment
Driver Location
New York, NY
Driver Location
Dallas, TX
Driver Location
Mobile, AL
Cost of driving
High
Cost of driving
Medium
Cost of driving
Low
Miles driven/mo
1,000 mi
Miles driven/mo
1,000 mi
Miles driven/mo
1,000 mi
CPM payment
$760Underpaid
CPM payment
$760Overpaid
CPM payment
$760Overpaid
FAVR payment
$872Fair payment
FAVR payment
$568Fair payment
FAVR payment
$463Fair payment

Ready to build the right
reimbursement program?

Whether your team needs CPM, FAVR, or a mix of both, you can trust the mileage experts at TripLog help you get started.

Get started with FAVR
Get started with FAVR