Fixed & Variable Rate (FAVR) Reimbursements

How does a FAVR vehicle
program work?

Driving a vehicle incurs two types of costs: ﬁxed and variable.

FAVR, or fixed and variable rate, addresses both – with tax-free payments.

Each employee receives a reimbursement rate based on:

A Standard Vehicle

Company-selected, job-appropriate car

Territory Costs

Geographically-sensitive costs

Territory Size

Mileage driven
within territory

What makes a FAVR reimbursement fair?

FAVR accurately addresses the costs of owning and operating a standard vehicle relative to each employee's territory costs and miles driven.

Unequal expenses should not receive equal reimbursements. Standard allowances and mileage rates over-reimburse some employees and under-reimburse others. FAVR solves this problem and is tax-free for both company and employee (IRS Revenue Procedure 2010-51).

How are FAVR reimbursements
calculated?

Fixed Costs

Time-Based Costs

Insurance
License & Registration
Automobile Taxes
Depreciation

Variable Costs

Distance-Based Costs

Gas
Oil
Maintenance
Tires

Hallmarks of a Professional Reimbursement

Customization

The policy reﬂects your company's goals and priorities.

Risk Mitigation

Best practices can prevent lawsuits and reduce liability.

Accuracy

Real-time data generates precise reimbursements.

Professionalism

The policy follows the latest in best practices.

Fiscal Responsibility

Tax-free, accurate reimbursements control costs.

Talent Attraction/Retention

Fair reimbursements mean happy employees.

Getting started has never been easier.

mBurse administers customized FAVR vehicle programs. We want you to focus on your business.

Our Approach

How we create and implement a new policy.

Design

Together, we design a solution based on your objectives

Data is our strength. We help you create a baseline for all vehicle categories to generate a customized reimbursement for each employee, based on vehicle values, fuel and insurance costs, and more.

Develop

mBurse develops your new reimbursement policy and rates

We partner with you to write a clear, customized auto reimbursement policy and rate, using our data models. We ensure fairness and continuity in how you manage reimbursing your drivers.

Implement

mBurse implements and manages your new program

To ensure smooth change management, we help you communicate the beneﬁts of your new policy. Once installed, we provide continued support to ensure you receive the full range of beneﬁts.