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Paper Trails > IRS Standard Mileage Rates: How to Calculate Mileage Rates

IRS Standard Mileage Rates: How to Calculate Mileage Rates

The 2026 IRS standard mileage rate for business use is 72.5 cents per mile from January 1 through June 30, and 76 cents per mile from July 1 through December 31. Medical and moving follow the same split at 20.5 cents, then 23.5 cents. Charitable stays at 14 cents all year.

The IRS raised the rates mid-year, which it almost never does. That means 2026 has two sets of rates, and the one you use depends on when the miles were driven rather than when the expense was submitted or paid.

 

Key Takeaways from this Article

  • 2026 has two sets of mileage rates. Business use is 72.5 cents per mile through June 30 and 76 cents from July 1 onward.
  • The increase is not retroactive. Miles driven in May stay at 72.5 cents even if the expense report was submitted in August.
  • One reimbursement run in July can legitimately contain miles at two different rates.
  • Reimbursing at or below the applicable rate is not taxable. Anything above it is taxable wages, and a flat 76 cents paid all year overpaid the first half.
  • Most employees cannot deduct unreimbursed mileage, which makes the employer's reimbursement policy the thing that matters.

 

What Are the IRS Standard Mileage Rates for 2026?

Here is every rate for 2026 alongside 2025, so you can see what moved and when.

Purpose 2025 Jan 1 to Jun 30, 2026 Jul 1 to Dec 31, 2026
Business 70 cents 72.5 cents 76 cents
Medical 21 cents 20.5 cents 23.5 cents
Moving (active-duty military only) 21 cents 20.5 cents 23.5 cents
Charitable 14 cents 14 cents 14 cents

 

The IRS set the original 2026 rates in late December 2025, then announced the mid-year increase on July 13, 2026, citing higher fuel prices. The charitable rate doesn't move because it's fixed by statute rather than calculated, which is why it has sat at 14 cents for years.

Business rates reflect both fixed and variable costs: depreciation, insurance, fuel, maintenance. Medical and moving rates cover variable costs only. That's why the medical rate can fall while the business rate rises, which is exactly what happened between 2025 and the first half of 2026.

 

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How Do You Calculate Mileage Reimbursement in 2026?

Multiply business miles by the rate in effect on the date of the trip. The arithmetic is simple. The date is what people get wrong this year.

A straightforward example. An employee drives 1,000 business miles in March. At 72.5 cents, that's $725. The same 1,000 miles driven in September comes to $760 at 76 cents.

Now the case that matters. An employee submits one expense report in September covering 400 miles driven in June and 600 miles driven in August. You don't pick one rate for the whole report. June miles are reimbursed at 72.5 cents for $290, August miles at 76 cents for $456, and the total is $746.

 

Scenario Calculation Reimbursement
1,000 business miles, March 2026 1,000 x $0.725 $725.00
1,000 business miles, September 2026 1,000 x $0.76 $760.00
400 miles June plus 600 miles August (400 x $0.725) + (600 x $0.76) $746.00
250 medical miles, September 2026 250 x $0.235 $58.75

 

If your expense system lets you set a single rate per reimbursement type, this is the year to check whether it also respects trip dates. A system that applied 76 cents to everything from January forward overpaid 3.5 cents on every first-half mile. On 400 miles that's only $14, but it's $14 of taxable wages that should have been reported.

 

What Is Included in the Mileage Rate?

The rate is meant to stand in for the full cost of operating a vehicle, so you don't have to keep receipts for every fill-up and oil change. It accounts for:

  • Fuel
  • Maintenance and repairs, including routine wear items like tires and oil changes
  • Insurance
  • Depreciation, which is the largest single component for business use
  • Registration fees and personal property taxes

 

What Is Not Included?

These sit outside the rate and are reimbursed or deducted separately where they qualify:

  • Parking fees and tolls, which can be reimbursed on top of mileage
  • Fines, tickets, and traffic violations, which never qualify
  • Interest on a car loan
  • Lease payments
  • Anything incurred during personal use of the vehicle

 

Parking and tolls are the two most commonly missed. Paying mileage and refusing a parking receipt from the same trip is a policy gap worth closing.

 

Who Can Use the Standard Mileage Rate?

  • Self-employed people and independent contractors, for business driving
  • Employees using a personal vehicle for work, subject to their employer's reimbursement policy
  • Active-duty members of the Armed Forces moving under orders, and qualifying members of the intelligence community
  • Individuals driving for medical care or in service of a charitable organization

 

Note the narrowness of the moving category. Since the Tax Cuts and Jobs Act, moving mileage applies only to those military and intelligence community cases, not to a general job relocation.

 

How Does the Mileage Rate Affect Taxes?

For employers, the rate is a ceiling. Reimburse at or below it and the payment isn't taxable to the employee. Go above it and the excess is taxable wages that belong on the W-2.

The mid-year change moved that ceiling. An employer paying a flat 76 cents from January was above the rate for six months, and that excess should have been treated as wages. An employer paying a flat 72.5 cents since July is below the rate, which is permitted but leaves employees short.

For self-employed people, business miles are deductible at the applicable rate against business income.

For employees, unreimbursed business mileage is generally not deductible under the Tax Cuts and Jobs Act. The exceptions are narrow: certain Armed Forces reservists, fee-based state and local government officials, some performing artists, and eligible educators under specific rules. For everyone else the employer's policy is the only route to getting paid for those miles.

Recordkeeping carries more weight this year than usual. With two rates in play, the date of each trip matters as much as the mileage, and a log that captures only totals won't survive review. Our guide to whether expense reimbursements are taxable covers the broader rules, and expense management best practices walks through policy setup.

 

FAQs: IRS Standard Mileage Rate

  • There are two. For miles driven January 1 through June 30, 2026: business 72.5 cents, medical and military moving 20.5 cents, charitable 14 cents. For miles driven July 1 through December 31, 2026: business 76 cents, medical and military moving 23.5 cents, charitable 14 cents.

  • 76 cents per mile for business use, effective July 1, 2026 and running through December 31, 2026. The IRS announced the increase on July 13, 2026, citing higher fuel prices.

  • No. The rate that applies is the one in effect on the date the miles were driven, not the date the expense was submitted or paid. Miles driven in May are reimbursed at 72.5 cents even if the expense report arrives in October.

  • Multiply the miles by the rate in effect on the trip date. 1,000 business miles in March 2026 comes to $725 at 72.5 cents. The same 1,000 miles in September comes to $760 at 76 cents. If one expense report spans both halves of the year, calculate each set of miles at its own rate and add them together.

  • Yes, as long as the reimbursement doesn't exceed the IRS rate in effect for those miles. At or below the rate it isn't taxable income. Above the rate, the excess is treated as taxable wages and reported on the employee's W-2.

  • In most cases no. The Tax Cuts and Jobs Act eliminated the deduction for unreimbursed employee business expenses. Limited exceptions remain for certain Armed Forces reservists, fee-based state or local government officials, some performing artists, and eligible educators.

  • The standard rate is simpler because it only requires accurate mileage records rather than receipts for every vehicle expense. Actual expenses can produce a larger deduction when operating costs are high. One rule drives the decision: if you own the vehicle, you must choose the standard rate in the first year it's available for business use. For a leased vehicle, once you choose the standard rate you have to keep it for the whole lease, renewals included.

  • No. Parking and tolls sit outside the standard rate and can be reimbursed or deducted separately. Fines and traffic tickets never qualify, and neither does loan interest, lease payments, or anything from personal use.

  • The IRS normally sets rates once a year in December. It raised them mid-year in 2026 because fuel prices climbed enough to make the original figure understate real operating costs. The last comparable mid-year adjustment was in 2022.

 

What to Check Before Year End

A mid-year rate change creates a small pile of cleanup that nobody schedules.

Three things worth confirming before December. Whether your expense system applied the right rate by trip date rather than by submission date. Whether any reimbursements went out above the applicable rate, since that excess belongs on a W-2 and fixing it in January is harder than fixing it now. And whether your written policy names a specific cents-per-mile figure, because a policy that says "72.5 cents" is now wrong and a policy that says "the current IRS standard mileage rate" never will be.

That last one is the fix worth making permanently. Policies that cite the rate instead of quoting it don't need rewriting every December.

Our local Maine team handles mileage reimbursement inside payroll, including the taxable portion when a reimbursement runs above the rate. If you're not sure how your first half of 2026 was processed, that's a reasonable thing to have checked.

 

Written: December 2025

Updated: October 2026

Written by: Jon Portanova

 

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