Mileage · rates of IRS 2026
Mileage reimbursement calculator, 2026 rates
Enter the business miles of each half of 2026 and the rate your employer pays: the tool prices them at the IRS rates and shows any part that turns into wages.
Published by Radif Partners · Rules and data · Editorial policy
Reimbursement at the IRS rates
$5,208
7,000 miles · $0.725 then $0.76
| First half: 3,200 mi × $0.725 | $2,320 |
| Second half: 3,800 mi × $0.76 | $2,888 |
| Parking and tolls | $0 |
| Your employer pays $0.725 a mile | $5,075 |
| Gap below the IRS rates (not deductible by an employee) | $133 |
Under an accountable plan the IRS rates are the most an employer can pay tax free without receipts for actual costs; the rate in force on the day of the drive applies. How this is calculated.
3,200 business miles in the first half of 2026 and 3,800 in the second are worth $5,208.00 at the IRS rates: $2,320.00 at 72.5 cents and $2,888.00 at 76 cents. That total is the most an employer can reimburse without receipts for actual car costs and without it counting as pay, provided the plan is an accountable plan: a business reason for each trip, a record of the miles, dates and places within a reasonable time, and any excess returned. An employer may pay less, and many do; the gap is lost for the employee, because unreimbursed employee driving is no longer deductible for most workers. An employer that pays more must report the excess as wages. The calculator above does those three things at once, and adds parking and tolls, which are reimbursed at cost on top of the rate.
Why the year must be cut at July 1
The IRS raised the business rate in the middle of 2026 (Announcement 2026-11). The new figure applies to miles driven on or after July 1 and to allowances paid for those miles. Miles driven earlier keep 72.5 cents, even when the expense report is filed in the autumn. An employer that pays "the IRS rate" therefore owes two prices for 2026, and a reimbursement system that switched everything to 76 cents on the day of the announcement overpaid June trips, a small excess that is technically wages.
The mileage log keeps the date of each trip and applies the right rate automatically, which settles the question line by line rather than with a split at the end of the year.
What a mile is worth in 2026
Value from July 1, 2026
$380
| 500 mi × $0.76 (from July 1) | $380 |
| 500 mi × $0.725 (Jan. 1 to June 30) | $362.50 |
| Difference | $17.50 |
When the employer pays less than the IRS rate
Federal tax law does not oblige a private employer to pay the IRS rate; whether your state's labor law asks for more is a separate question this tool does not answer. At $0.60 a mile, an employee who drives 7,000 business miles in the second half of 2026 receives $4,200 instead of $5,320, a shortfall of $1,120. Before 2018 that gap could be deducted as a miscellaneous itemized expense; the deduction was suspended that year and made permanent by the One Big Beautiful Bill Act, as Notice 2026-10 recalls. Reservists, fee-basis state and local officials, certain performing artists and eligible educators are the exceptions.
When the employer pays more
An allowance above the IRS rate is not illegal, it is partly taxable. Under Rev. Proc. 2019-46 only the amount up to the standard rate is deemed substantiated. Paid $0.85 for 4,000 miles driven after July 1, an employee receives $3,400: $3,040 is tax-free and $360 goes on the W-2 with income tax, Social Security and Medicare withheld, unless the employee returns it. Payroll software usually books it as a separate wage item, so the pay stub shows where the extra cents went.
Flat allowances and FAVR plans
A fixed monthly car allowance with no mileage record is pay from the first dollar. Some employers combine a fixed part for ownership costs and a variable part per mile, the fixed and variable rate (FAVR) plan of Rev. Proc. 2019-46; for 2026 the standard vehicle cost in such a plan cannot exceed $61,700. The allowance against mileage page compares a flat allowance after tax with mileage at the IRS rate.
Federal employees
Agencies follow the GSA rates rather than the IRS table: $0.76 a mile from July 1, 2026 for a personal car, $0.235 when a government car was available and the traveler preferred their own (GSA). The trip calculator offers both, next to the per diem of the trip.