FAVR Dictionary: Terms, Mileage Types, and Definitions
The Kliks FAVR Dictionary organizes the terms that finance, HR, payroll, reimbursement administrators, and buyers encounter when evaluating a Fixed and Variable Rate program. It combines core IRS-defined terminology from Revenue Procedure 2019-46 and Publication 463 with the mileage classifications and operating shorthand that most often create confusion.
Mileage types
- Business mileage is the substantiated employee driving that supports reimbursement.
- Commuting mileage is generally personal transportation between home and a regular work location.
- Personal mileage is nonbusiness use and should not be reimbursed as business miles.
- Temporary work location mileage and between-workplaces mileage are categories teams should review carefully under Publication 463.
Core FAVR terms covered
The full page defines FAVR allowance, periodic fixed payment, periodic variable payment, base locality, standard automobile, standard automobile cost, annual mileage, annual business mileage, business use percentage, retention period, retention mileage, residual value, optional high mileage payment, accountable plan, nonaccountable plan, substantiation, control employee, management employee, depreciation component, and related payroll treatment concepts.
Why this page exists
Many reimbursement mistakes start as vocabulary mistakes. Teams confuse commuting with business miles, assume FAVR is based on the employee's exact car, or treat the acronym as enough to make a payment tax-free. This dictionary is meant to close that gap before policy, payroll, or implementation work begins.
Related pages
- FAVR Guide for full program design and IRS requirements.
- FAVR vs CPM for reimbursement method comparison.
- Resources for migration, security, and implementation materials.