A field sales rep who drives 1,200 business miles in October is owed $912 at the IRS rate. The same 1,200 miles driven in May would have paid $870.
That $42 gap comes from a rare change. The IRS raised its standard mileage rate in the middle of 2026, so this year has two reimbursement rates instead of one.
This guide covers both 2026 rates, how to calculate what you're owed, which miles count, and how to track and submit mileage along with the other costs of a business trip.
What Is Mileage Reimbursement?
Mileage reimbursement is money an employer pays you for driving your own car for work. Instead of adding up gas, oil changes and wear on the tires, the company pays a set amount for each business mile.
Most US employers use the IRS standard mileage rate as their per-mile amount. It's built to cover the full cost of running a car, including fuel, maintenance, insurance and depreciation. Payments at or below that rate, backed by a mileage log, aren't taxed as wages.
What Is the IRS Mileage Rate for 2026?
Type of driving
Jan 1 to June 30, 2026
July 1 to Dec 31, 2026
Business
72.5 cents per mile
76 cents per mile
Medical and qualified military moves
20.5 cents per mile
23.5 cents per mile
Charity work
14 cents per mile
14 cents per mile
The business rate is the 2026 mileage reimbursement rate most people need. It applies to cars, vans, pickups and panel trucks, whether they run on gas, diesel, hybrid power or electricity.
Key rule
Which rate you use depends on the date you drove, not the date you file or get paid. Miles driven through June 30 get 72.5 cents, and miles from July 1 on get 76 cents.
Why the standard mileage rate changed on July 1
The IRS first set the 2026 rates in Notice 2026-10 in late December 2025. Gas prices then rose sharply. AAA's national average for regular went from $2.819 a gallon on January 8 to $3.890 on July 15, according to the Journal of Accountancy.
In response, the IRS issued Announcement 2026-11 and raised the business rate by 3.5 cents for the second half of the year. It's only the second mid-year change in a decade, after July 2022. The charity rate stayed put because Congress sets it by law.
How to Calculate Mileage Reimbursement
Mileage reimbursement formulaBusiness miles × IRS rate for the date driven, plus business parking and tolls
For 2026, that works out to four steps:
Total your business miles from January 1 to June 30 and multiply by $0.725.
Total your business miles from July 1 onward and multiply by $0.76.
Add the two results.
Add parking fees and tolls from business trips, since the per-mile rate doesn't include them.
Here's how it looks for a full year. A field technician logs 3,600 business miles from January to June and 4,100 miles from July to December. The technician also paid $140 in parking and $62 in tolls on work trips.
Item
Calculation
Amount
January to June miles
3,600 × $0.725
$2,610.00
July to December miles
4,100 × $0.76
$3,116.00
Parking
From receipts
$140.00
Tolls
From statements
$62.00
Total reimbursement
Sum of the above
$5,928.00
Why the split matters
If the whole year had been paid at 72.5 cents, the technician would have been shorted $143.50 on the second-half miles.
Mileage Reimbursement Calculator Table
Find your business miles on the left and read across. Use the column that matches when you drove.
Business miles
Jan to June 2026 (72.5 cents)
July to Dec 2026 (76 cents)
50
$36.25
$38.00
100
$72.50
$76.00
250
$181.25
$190.00
500
$362.50
$380.00
750
$543.75
$570.00
1,000
$725.00
$760.00
2,500
$1,812.50
$1,900.00
5,000
$3,625.00
$3,800.00
For miles not listed, a mileage reimbursement calculator does the same thing: miles times the rate. You can also add two rows together. For 1,250 miles in August, add the 1,000 and 250 rows to get $950.
Trips in a company car your employer already pays for
No
The commuting rule
Commuting is the rule that trips up most people. Driving from home to the office you report to every day is personal, even if it's a long drive. Driving from that office to a client site is business.
Does Your Employer Have to Pay the IRS Mileage Reimbursement Rate?
No federal law requires employers to reimburse mileage at all, let alone at the IRS rate. The rate works as a tax ceiling, not a minimum.
Under an accountable plan, reimbursement up to the IRS rate stays out of your taxable income, as long as you report dates, miles and business purpose. Any amount above the IRS rate becomes taxable wages on your W-2.
State law can go further. Some states, including California and Illinois, require employers to reimburse necessary work expenses, which includes required driving in a personal car.
July top-up example
If your company kept paying 72.5 cents after July 1, you may be owed a top-up. Someone who drove 650 business miles in July would be short $22.75 (650 × $0.035).
Mileage Reimbursement vs. Car Allowance vs. Actual Expenses
Employers pay for business driving in a few different ways, and the tax result differs for each.
Topic
Mileage reimbursement
Car allowance
Actual expenses
How the amount is set
Business miles × a per-mile rate
Flat monthly amount
Real costs × business-use share
Taxed as wages?
No, at or below the IRS rate with a log
Yes, unless tied to logged miles
No, when reimbursed with receipts
Records needed
Mileage log
None by default
Mileage log plus receipts for gas, repairs, insurance
Works best for
Most people driving their own car
Employers who value simplicity over tax savings
Expensive vehicles or low-mileage drivers
Don't double pay
One rule applies across all three: an employer shouldn't pay both the per-mile rate and your gas receipts. The mileage rate already includes fuel, so paying both covers the same cost twice.
Some larger employers use a fixed and variable rate (FAVR) plan, which splits payments into a fixed monthly part and a per-mile part. For 2026, the maximum vehicle cost allowed under a FAVR plan is $61,700.
Can You Deduct Mileage Instead of Getting Reimbursed?
If you're self-employed, yes. Freelancers, contractors and small business owners who file Schedule C can deduct business miles at the standard rate or deduct actual car costs instead.
If you're a W-2 employee, usually not. The federal deduction for unreimbursed employee expenses was suspended in 2018 and made permanent by the One Big Beautiful Bill Act. Only four groups can still claim it on Form 2106: Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, and employees with impairment-related work expenses.
That makes reimbursement the main way most employees recover driving costs. A few states, such as California, still allow employee expense deductions on the state return.
What Records Do You Need for Mileage Reimbursement?
The IRS expects a log made at or near the time of each trip.
For every business drive, record
The date
Where you started and where you went
The business purpose, like "site inspection at Parker Street job"
The miles driven, or odometer readings at the start and end
Add your odometer reading on January 1 and December 31 so you can show total miles next to business miles. Keep receipts for parking and tolls, and keep gas and repair receipts if you use actual expenses. IRS Publication 463 covers the full rules, and records should be kept at least three years after you file.
How to Track Business Mileage and Travel Expenses
At the start of the yearNote your odometer reading and pick one place for your log, whether that's an app, a spreadsheet or a notebook in the glove box.
On each tripLog the drive the same day. Snap a photo of any parking stub or toll receipt before it goes missing. If the trip includes a hotel stay, keep that folio too.
At the end of each monthTotal your miles and add up parking and tolls. For 2026, keep June and July in separate totals so the right rate applies to each.
ManageReceipt handles the receipt side of this. The receipt scanner captures parking stubs, toll receipts and fuel receipts as you get them, so nothing sits in a cup holder until month-end. For overnight trips, our guide to per diem for business travel explains how meals and lodging are handled alongside mileage.
How to Submit a Mileage Reimbursement Request
Reimbursement request checklist
Your mileage log, with totals split by rate period for 2026
The rate used for each period (72.5 cents or 76 cents)
Parking and toll receipts
The business purpose for each trip
A note on anything unusual, such as a long detour for a client
Timing rule
Under the IRS safe harbor for accountable plans, submit your records within 60 days of the driving and return any overpayment within 120 days. Following that timing keeps the reimbursement out of taxable wages.
With ManageReceipt, you can pull a month's receipts into an expense report to attach to your mileage log. If you're self-employed, the same records roll into tax reports at filing time.
FAQs About Mileage Reimbursement in 2026
What is the 2026 mileage reimbursement rate?
The IRS business rate is 72.5 cents per mile for driving from January 1 to June 30, 2026, and 76 cents per mile from July 1 to December 31, 2026. Most employers use these as their reimbursement rate.
Is mileage reimbursement taxable?
Not if it's paid at or below the IRS rate under an accountable plan and you keep a mileage log. Amounts above the IRS rate, or flat allowances with no log, are taxable wages.
Can my employer pay less than the IRS rate?
Yes, under federal law. Some states set extra rules, so a rate that's far below real driving costs may not meet state requirements.
Does mileage reimbursement cover gas?
Yes. The standard mileage rate already includes fuel, so gas isn't reimbursed separately on top of it.
Does the IRS mileage rate apply to electric cars?
Yes. Electric, hybrid, gas and diesel vehicles all use the same 2026 rate.
When will the 2027 mileage rate be announced?
The IRS usually releases next year's rates in late December. We'll update this page when the 2027 numbers are out.
Getting Mileage Reimbursement Right This Year
72.5 cents through June 30, 2026. 76 cents from July 1.
Use 72.5 cents for business miles driven through June 30, 2026, and 76 cents from July 1 on. Log every trip on the day you drive it, keep parking and toll receipts, and submit within 60 days. That's all a clean mileage reimbursement needs.
Track your next drive with Manage ReceiptSnap parking, toll and fuel receipts as you go and send one report at month-end.
