FAVR Rates - Acme Company

SubCompact Vehicle

Make/Model: Toyota Corolla
Year: 2022

Retention years: 4
(Number of years of vehicle ownership)
Retention Miles (2 options):
(Total mileage for total retention years)

  • 40,000
  • 60,000

Insurance Coverage

  • Bodily Injury ($10k/$20k)
  • Property Damage ($10k)
  • Personal Injury ($10k)

Fuel Type

  • Regular

Annual Business Mileage (2 options)

  • 10k miles per year
  • 15k miles per year

IRS/CPM rate – 2022

  • $0.585

Business Use %

  • 72%

Rates

  • Employee Name: Alice Cornet
  • Address: 3135 Dark Sky Dr, St Cloud, FL 34773
  • Mileage Band: 10k
Fixed / month Variable / mile Previous year mileage (approx) Annual Reimb*
(0.585 / FAVR)
$165.36 $0.10 5500 $3.2k / $2.5k
  • Employee Name: Louis Hamilton
  • Address: 3135 Dark Sky Dr, St Cloud, FL 34773
  • Mileage Band: 10k
Fixed / month Variable / mile Previous year mileage (approx) Annual Reimb*
(0.585 / FAVR)
$165.36 $0.10 5500 $3.2k / $2.5k
  • Employee Name: Ava Lovelace
  • Address: 4401 Belvidere Street, Orlando, FL 32809
  • Mileage Band: 10k
Fixed / month Variable / mile Previous year mileage (approx) Annual Reimb*
(0.585 / FAVR)
$163.20 $0.09 9500 $5.5k / $2.8k
  • Employee Name: Michael Bloom
  • Address: 1508 Larks Nest Court, Orlando, FL 32824
  • Mileage Band: 15k
Fixed / month Variable / mile Previous year mileage (approx) Annual Reimb*
(0.585 / FAVR)
$193.07 $0.11 11500 $6.7k / $3.5k

How IRS based FAVR is calculated

  • Fixed costs are related to Vehicle ownership over time, these costs remain the same (Fixed) based on a projected time period. The derived Fixed Rate is paid on frequent intervals, usually monthly
    • Depreciation – the cost of the value of a vehicle decreasing over the length of time it is owned. The longer it is owned, the harsher conditions it is driven in, and the more it’s driven the less its value. 
    • Insurance – insurance policy cost is determined by the vehicle, coverage, location, and driver profile
    • Taxes – these include Sales, License Fees, Excise and/or Property Taxes based on the users’ location. These vary state to state
  • Variable costs are related to Vehicle Mileage, and specifically business miles. The more miles are driven the higher the costs of Fuel used, Maintenance from wear and tear, and similarly the more frequently Tires will need changing. The derived variable rate is based on Cent per Mile, calculated as Number of Miles driven * CPM rate.
    • Fuel – the cost of fuel in the users’ location is taken into account along with fuel consumption ratings (city and highway) for the standard vehicle selected
    • Maintenance / Tires – the cost of maintenance for the standard vehicle selected.