Mileage Reimbursement for Business Travel With 2026 IRS Rates, a Calculator and Expense Tracking Tips

Last updated: October 2026. Includes both 2026 IRS rate periods (Notice 2026-10 and Announcement 2026-11).

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.

What Is Mileage Reimbursement?

Mileage reimbursement is money an employer pays employees for driving their personal vehicle for work. It's usually calculated by multiplying business miles by a per-mile rate, most often the IRS standard mileage rate, which covers fuel, maintenance, insurance and depreciation.

Instead of adding up every gas receipt and oil change, the per-mile rate rolls the full cost of running a car into one number:

• Fuel and oil
• Maintenance and repairs
• Tires and general wear
• Insurance and registration
• Depreciation

Payments at or below the IRS rate, backed by a mileage log, aren't taxed as wages.

What Is the Current Mileage Reimbursement Rate for 2026?

The current mileage reimbursement rate for 2026 is 76 cents per mile for business driving, in effect since July 1. Before that, the rate was 72.5 cents.

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. You can confirm the current figures on the IRS standard mileage rates page.

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.

IRS Mileage Rates by Year

If you're reimbursing an older claim or comparing years, use the rate for the period the miles were driven.

The mileage reimbursement rate for 2025 was 70 cents per mile, so the 2026 starting rate of 72.5 cents was 2.5 cents higher, and the July rate is 6 cents higher.

How to Calculate Mileage Reimbursement

For 2026, that works out to four steps:

1. Total your business miles from January 1 to June 30 and multiply by $0.725.
2. Total your business miles from July 1 onward and multiply by $0.76.
3. Add the two results.
4. 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.

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.

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.

Which Miles Count as Business Travel?

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.

What Are the IRS Rules for Tax-Free Mileage Reimbursement?

The IRS doesn't tell employers how much to pay. Its rules decide whether the payment is taxed. Reimbursement stays off your W-2 when it's paid under an accountable plan, which has three conditions:

1. Business purpose: The miles were driven while doing your job.
2. Proof: You give your employer a log with dates, places, purpose and miles within a reasonable time.
3. Return of extra: You pay back any amount you received above what you can prove.

The IRS treats 60 days to submit records and 120 days to return an overpayment as reasonable. A plan that skips any of these, such as a flat amount with no log, is non-accountable, and every dollar becomes taxable wages. IRS Publication 463 explains both plan types in full.

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. Any amount above it becomes taxable wages.

There is one federal floor. Under the Fair Labor Standards Act, if driving costs push a nonexempt employee's pay below the federal minimum wage, the employer has to make up the difference.

State law can go further:

Most of these states don't set their own per-mile number, so employers usually pay the IRS rate to stay safe.

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.

Some larger employers use a fixed and variable rate (FAVR) plan, which splits payments into a fixed monthly part for insurance and depreciation and a per-mile part for gas and upkeep. For 2026, the maximum vehicle cost allowed under a FAVR plan is $61,700.

Mileage and per diem work side by side. Per diem covers meals, lodging and incidental costs on overnight trips. It doesn't include driving costs, so on a multi-day trip in your own car you can claim both: per diem for each day away, and mileage for the business miles you drove. Our guide to per diem for business travel covers the daily rates.

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.

A few rules decide which method you can use:

• If you own the car, you must use the standard rate in the first year you use it for business if you want the option to use it later.
• If you lease the car and choose the standard rate, you have to keep it for the whole lease.
• You can't use the standard rate if you run five or more vehicles at the same time.

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.

Setting a Mileage Reimbursement Policy for Your Small Business

A short written policy prevents most mileage disputes and keeps payments tax-free. It should cover:

• Your rate: Whether you pay the IRS rate and update it when the IRS does, or a custom rate. If fuel and insurance cost more in your area, you can pay more, but anything above the IRS rate is taxable.
• What counts: Spell out business trips versus commuting, with a couple of real examples from your team's work.
• Driver basics: A valid license, insurance on the car, and a vehicle that's safe to drive.
• Log format: One method for everyone, whether an app or a standard form, with date, start and end point, purpose and miles.
• Deadlines: Submit within 60 days, return any overpayment within 120 days.
• Extras: How parking and tolls are claimed, and that gas isn't paid on top of the mileage rate.

For 2026, add one line on the mid-year change so staff know which trips get 72.5 cents and which get 76 cents.

If a log looks wrong, ask before assuming anything. Most errors are rounding or a personal stop that slipped in, and the employee can correct the log. Paying on a bad log can turn the reimbursement into taxable wages, so fix it before approval.

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. Records should be kept at least three years after you file.

How to Track Business Mileage and Travel Expenses

1. 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.
2. On each tripLog the drive the same day. Snap a photo of any parking stub or toll receipt before it goes missing. For overnight trips, keep your hotel folio with them so the whole trip goes into one report.
3. 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.

Manage Receipt 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.

How to Submit a Mileage Reimbursement Request

Many employers use a mileage reimbursement form. If yours doesn't have one, a simple form or report with these fields works:

Before you submit, check that:

• Totals are split by rate period for 2026
• Every parking and toll amount has a receipt
• Each trip has a business purpose
• Anything unusual, such as a long detour for a client, has a note

With Manage Receipt, 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.

Frequently Asked Questions

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. If you run a business, put those same rules in a short written policy. That's all a clean mileage reimbursement needs.

This guide explains general US tax rules for mileage reimbursement. Rates and rules can change, so check the IRS website or a CPA or enrolled agent about your own situation. It isn't tax or legal advice.