Expenses and benefits: business travel mileage for employees' own vehicles

Skip to contents of guide

Rules for National Insurance

You might have to deduct and pay National Insurance on payments relating to relevant motoring expenditure (RME), which includes:

  • Mileage Allowance Payments (MAPs)
  • payments that would be MAPs, but are paid to a person other than your employee, for your employee’s benefit
  • any other cash payments you make to your employee towards the use of their vehicle

A certain amount of RME will be exempt from reporting to HM Revenue and Customs (HMRC) or paying National Insurance on. This is called the ‘qualifying amount’.

Work out the value

To calculate out the ‘qualifying amount’, multiply your employee’s business miles in the earning period by the rate per mile, shown in the table below.

National Insurance: rates per business mile

Type of vehicle Every business mile
Cars and vans 45p
Motorcycles 24p
Bikes 20p


Your employee drives 1000 miles in their van, and you make a payment of RME to cover this. The qualifying amount for the earnings period would be £450 (1,000 x 45p).

What to report and pay

If the RME you provide to your employee in the earnings period exceeds the qualifying amount:

  • add the excess to their other earnings for that earnings period when calculating Class 1 National Insurance (but not Pay As You Earn (PAYE) tax) through payroll

If the RME is below the qualifying amount, you have:

  • nothing to report
  • no National Insurance to pay

There’s no Mileage Allowance Relief for National Insurance, and you cannot carry forward the difference between RME and the qualifying amount to a later earnings period.