Mileage reimbursement helps cover the cost when employees use their personal vehicles for work-related travel. In South Dakota, state employees are reimbursed for mileage when driving on official state business, with rates aligned to the IRS standard mileage rate for 2026, as outlined in South Dakota Statute § 3-9-1.

For private employers, mileage reimbursement is generally optional. Even so, establishing a clear reimbursement policy can offer real benefits, including:

• Supporting employee satisfaction and retention by covering legitimate travel costs
• Helping ensure compliance with South Dakota’s minimum wage requirements when work-related expenses are involved

While South Dakota’s workers’ compensation rules do not require mileage reimbursement, many employers choose to offer it as part of a fair and consistent approach to employee expenses.

South Dakota business mileage reimbursement rates

In 2026, South Dakota state employees are reimbursed at $0.725 per mile for business travel using personal vehicles, aligning with the IRS standard mileage rate.

Private employers in South Dakota are not legally required to follow these specific rates. However, implementing a clear mileage reimbursement policy can enhance employee satisfaction and retention, while also ensuring compliance with South Dakota's Minimum Wage Law. While South Dakota’s Workers’ Compensation Program does not mandate mileage reimbursement, offering it reflects a commitment to fair labor practices.

Here's an overview of mileage reimbursement rates in South Dakota as per IRS standards.

South Dakota mileage reimbursement laws

Following South Dakota mileage reimbursement laws—even though some of them, such as Statute §3-9-1, do not mandate you, a private employer, to offer mileage reimbursement—can keep your business out of legal troubles and civil lawsuits.

The most crucial policies span from precise stipulations for state employees under §3-9-1 to broader advisories for private employers. Here's a breakdown of critical policies that could significantly influence your business.

Statute §3-9-1 for state employees' mileage reimbursement

For state employees in South Dakota, mileage reimbursement is authorized by the Bureau of Finance and Management under Statute §3-9-1. Employees using personal vehicles for state business are reimbursed at the standard rate.

Additionally, under Statute §3-9-1, individuals with special needs who utilize modified vehicles are reimbursed at 130% of the IRS standard rate. This adjustment accounts for rising costs and inflation.

Please note: This enhanced rate applies only to privately owned passenger or cargo vans, pickup trucks, and sport utility vehicles.

Workers compensation law and its impact on mileage reimbursement

Unlike most states, South Dakota doesn't require you to carry Workers' Compensation Insurance. However, offering this along with mileage reimbursement for injured employees is advisable. Injured employees might sue your business in civil court if you don't.

Moreover, if any injured employees suffer from occupational diseases like silicosis, as specified in Statute 68-8-1, compensating them becomes mandatory. Under Code 62-8-4 of the Workers' Compensation Law, such diseases are treated as accidental injuries.

South Dakota minimum wage law and its impact on mileage reimbursement

As per South Dakota's Minimum Wage Law, in 2026, you must offer your employees the minimum wages listed below.

• Pay $11.85 per hour to non-tipped employees.
• Pay $5.925 per hour to tipped employees

Though mileage reimbursement isn't mandated by the Minimum Wage Law, if using personal vehicles for business brings your employees' wages below the minimum, you must cover the shortfall to meet state minimums.

Exemptions from the Minimum Wage Law apply if you employ any of the following:

• Babysitters
• Outside salespersons
• Apprentices and learners
• Individuals with developmental disabilities under special permits from the Department of Labor and Regulation.

Enjoy simplified mileage tracking with Ramp

Following South Dakota's mileage reimbursement laws extend beyond meeting compliance. It's a strategic advantage for your business. When fairly implemented, mileage reimbursement can offer the following benefits.

• Ensure your employees are compensated fairly for their travel.
• Boost your team's morale by committing to their financial welfare.
• Build your team's trust in you, motivating them to be more productive
• Make your business more profitable

Integrating Ramp into your operations can transform how you handle these reimbursements. Ramp's AI-driven expense management system automates mileage tracking, reducing administrative burdens and minimizing errors in logging travel expenses.

By using this tool, you can ensure accuracy in reimbursements, comply effortlessly with state guidelines, and free up time to focus on core business activities. Embrace Ramp to simplify mileage reimbursement, reinforcing your role as a responsible employer in South Dakota.