Mileage Reimbursement: Asleep At the Wheel

It’s very common for families to ask their employee to perform job tasks using her own car (i.e. errands, drop-offs, pick-ups, etc.). With the high price of gas, mileage reimbursement has become an increasingly important line item on the paystub. This case helps families understand the law regarding mileage reimbursement and how to handle it correctly.

The Mistake
The Smith family had been employing a nanny, Sarah, in Washington, D.C. for about two years. As the family’s needs changed, they asked Sarah to drive their son to his different lessons and extra-curricular activities each week. They asked Sarah to take on this extra responsibility and told her they would raise her hourly rate by $1 if she agreed to drive her own car. Based on a rough estimate of the expected mileage, they thought that a $1 per hour raise would be sufficient to cover the cost of gas. Sarah thought it was fair and reasonable and agreed to it.

The Law
Although federal law does not require an employer to reimburse an employee for mileage, the law is stricter in some states. In Washington D.C. for example, the law requires employers to reimburse their employees for all business-related travel expenses incurred as part of the job.

The IRS has established a mileage reimbursement rate that employers should use for employee-driven miles. The rate covers the cost of gasoline as well as general wear and tear on the vehicle. The mileage reimbursement rate is currently set at 55.5 cents per mile.

The IRS does not view mileage reimbursement as compensation and, therefore, it is not taxable to the family or the employee.

Note: Miles driven to and from the job site each day are not considered “on the job.” Any reimbursement for those commute miles is considered compensation and would be subject to taxation.

The Mess
Even though Sarah agreed to the “raise” and both thought it was a fair and reasonable amount, adding the mileage reimbursement to her “straight” wages ended up hurting both parties.

First, the payments were not accurate. Occasionally, Sarah drove fewer miles than expected and the compensation worked in her favor, but usually there were numerous unexpected errands totalling 30-50 miles per week that Sarah handled without any incremental compensation. Additionally, Sarah was taxed on the mileage pay and, therefore, only pocketed about $0.80 of every dollar. Between the taxes and the unexpected miles, Sarah’s “raise” did not adequately cover her job-related auto expenses.

Because it was handled as “straight” wages instead of a non-taxable reimbursement, the family had to pay employer taxes on every dollar. So, each mileage dollar cost them about $1.10. Worse, the failure to record the mileage appropriately — and reimburse Sarah as required by Washington, D.C. law — exposed the family to a potential legal dispute. If the relationship had ended badly, Sarah could have filed a complaint. The judge would have most likely ruled that she had never received ANY mileage reimbursement (since there was no record of such) and ordered the family to pay her 55.5 cents for every mile.

The Outcome
About 3 months into this new arrangement, Mr. Smith happened to discuss mileage reimbursement with his neighbor who also employs a nanny and uses our service. Realizing that the $1/hour “raise” was a tax and legal mistake, Mr. Smith called us and asked how to fix the situation.

We helped the Smiths figure out the the correct mileage reimbursement for the previous 3 months and reconcile the difference with his employee and the tax agencies. We also produced paystubs reflecting the correct mileage and mileage reimbursement so that both parties would have proper documentation.

How the Whole Thing Could Have Been Avoided
Knowledge is power. The Smith family ended up spending more on wages and taxes than they needed to — all because they didn’t have good guidance on the financial, legal and HR aspects of household employment. Fortunately, in this case, the mistake was relatively small and discovered early.

To help families avoid all of the tax and legal potholes, we continue to invest in educational resources and complimentary consultations. Whether families use our service or not, this 10-minute phone call almost always saves time, money and frustration.

If you have additional questions, please call 888-BREEDLOVE (273-3356)
or visit We’re here to help our agency partners
provide clients and candidates with information, tools and resources
that improve the employment relationship, eliminate legal risk for all parties,
and increase the professionalism of the industry.

Families everywhere are tightening their belts and saving money wherever they can. With the help of the internet, people can do almost everything themselves. For some families that means finding your own nanny or babysitter. Thousands of parents use websites to search for nannies and babysitters. These sites give parents immediate access to sitters in almost every city across the country. But what kind of screening can these low cost websites really provide?

Jordan Liu a 19 year old male was arrested November 22nd on sexual assault charges. He is accused of molesting two young Glendale California boys. Liu was the family’s once-a-month babysitter for almost eight months. The family hired him using does an instant background check and cross references the applicants name with state run sex offender’s registry.

While using a web based childcare matching service or Craigslist may be quick it is not the safest option for families. Traditional brick and mortar agencies still provide the best option for families. If you prefer to conduct the search on your own please be aware of the screening promised by the website.

Instant background checks do not cover all jurisdictions. Employers also need to go back to every state and country where the nanny has previously lived and check those records too. is the only web based nanny agency that doesn’t subscribe to instant background checks. When employers register with us they understand that we do not screen any of our candidates. How could an agency properly interview, screen, and run background checks on hundreds of candidates instantly

Instead we give the parents the tools and education needed to do the search themselves. And if in the end parents decide that they would like to hire a traditional agency to conduct their search they can use our parent company TLC For Kids, Inc.

Debbie Hipp
Website Director

When I looked at my calender today I found myself surprised that the end of the year is rapidly approaching.  After I got over the initial shock and ran through my mental to do list, I remembered that the nomination forms for the 2011 Nanny of the Year or NOTY are due at the end of Feb. 2012.

Do you know a St. Louis nanny who has made a difference in your kids’ lives?  Do you feel your nanny is as close to perfect as they come? Then nominate her!  I can’t think of a better way to wrap up the year!
Check out a link:

I can already think of a few great TLC nannies to nominate….


What an interesting topic for St. Louis families and nannies!  We are all focused on being environmentally friendly, what better way than to start in your baby’s nursery?  Thanks to the International Nanny Association for such an interesting article.

Enjoy reading, Jessica

TLC for Kids

Five Steps to a Greener Nursery
By Cortney Gibson, Soon-to-be Certified Greenproofer

As newborn care specialists, we know that our clients look to usfor advice on everything from what they should buy for the nursery to which parenting books they should read. They rely on us to be informed, knowledgeable, and current on safe newborn care practices. I’m sure you’ve answered hundreds of questions about nursery necessities and preparing for Baby, but have you ever researched how to make your clients’ nursery healthier and safer?

Now, more than ever, it’s critical to know what makes for a green nursery and how to help your clients achieve it. There are five easy steps to assembling a non-toxic nursery. Here a few simple suggestions to get you started.

1. Air, water, and food. We can’t live without them, so be sure they are as clean as possible. Air purifiers, open windows, ceiling fans, and houseplants can help keep the air cleaner. Reverse osmosis water filtration systems or even a Zero Water filter pitcher can make for cleaner water. As for food, help your clients learn about the benefits of eating organic, whole foods. Visit to learn more about which fruits and vegetables should be purchased organic and which ones can be conventional.

2. Walls, floors, and windows…oh my. If your clients are considering replacing the carpet in the nursery, encourage them to seek a resource for non-toxic flooring. Traditional carpeting is often referred to as “toxic soup” because of the overwhelming number of toxic chemicals found in it. Opt for wool carpet or rugs that haven’t been treated with chemicals. Alternatively, hardwood floors with a no-VOC (Volatile Organic Compounds) finish are a great choice. For the walls and any painted furniture, encourage your clients to buy low or no-VOC paint, allow for plenty of ventilation during the painting process and do the job well in advance of Junior’s arrival. For windows, steer clear of heavy fabric curtains, which can harbor dust mites and other allergens. Instead, new parents might consider wooden plantation shutters or a simple fabric blackout roller shade, which can easily be vacuumed and kept clean.

3. Eco-friendly bedtime for Baby. Generally speaking, babies spend more time in their cribs than anyplace else in the home. This is why the crib and mattress are probably the most important purchase parents can make. To help them make the best choice for their family, suggest that they look for a hardwood crib with a non-toxic finish. Finding a green mattress is a bit trickier. By law, mattresses have to be flame retardant, which means traditional mattresses are dipped in incredibly toxic chemicals. Parents can look for a wool mattress surrounded by organic cotton. Alternatively, an impermeable cover can be purchased that will keep the traditional mattress from off gassing toxic fumes.

4. Everything that touches Baby’s skin should be organic. These days, it’s much easier to find organic cotton and bamboo clothing and linens than even a few years ago. Whenever possible, clothing, sheets, blankets, towels, washcloths, and bibs should be organic cotton or bamboo. To keep everything clean and soft, teach your clients about laundering with dye free and fragrance free detergent and to try using distilled white vinegar in place of softener. For bath time, non-toxic soaps and lotions are a must. Don’t be fooled by a “natural” looking bottle of baby soap. Read the label and then check for more information on your favorite products.

5. All that glitters is probably toxic. Finding green toys for babies is no easy task, but it is possible. By now you’ve probably figured out that most toys sold in the USA are made in China, contain tons of petroleum products, and are generally bad for people and the planet. Help your clients find safe toys by looking for wooden or organic cotton toys from reputable companies. Try and

As professionals, I believe it’s our responsibility to give our clients the most current information on health and safety, so that they can fully research for themselves and make informed decisions about caring for their newborns. Just as we teach parents to put babies safely to sleep on their backs, we should also teach them about the hidden toxins lurking in their nurseries and help them choose healthier products for their homes. The planet will thank you and your clients will think of you as their own personal superhero. What are you going to do to be a little greener today?

To learn more about becoming a Greenproofer, visit