ReckonBoxWhat a mile is worth in reimbursement
Mileage reimbursement is the miles you drove for a purpose multiplied by the IRS standard rate for that purpose. At the business rate, 1,000 miles is 1,000 times 0.76, or $760.
The rate is not a gas figure. The IRS standard mileage rate is built to cover the whole cost of running a car, fuel, maintenance, tires, insurance, and depreciation, which is why 76 cents a mile dwarfs the roughly 14 cents of gas those miles burn at 25 MPG. Reimbursing at the standard rate is meant to make a driver whole for the true cost of the miles, the fuel plus everything else.
The rate that changed mid-2026
The IRS business standard mileage rate is 76 cents per mile from July 1, 2026, raised from 72.5 cents at the start of the year. The IRS confirmed the increase on rising fuel costs, a mid-year change it makes only rarely, as it last did in 2022.
That split matters for anyone logging miles across the year. A business trip in March 2026 reimburses at 72.5 cents and the identical trip in August at 76 cents. The medical and moving rate moved the same way, from 20.5 to 23.5 cents, while the charity rate sits at 14 cents, fixed by statute rather than set by the IRS each year. This tool applies the current rates from July 1.
| 2026 IRS standard rate | Cents per mile |
|---|---|
| Business (from July 1) | 76 |
| Medical or moving (from July 1) | 23.5 |
| Charity (fixed by law) | 14 |
Reimbursement, deduction, and employer plans
The same rate underlies a few different uses. An employer can reimburse an employee tax free up to the IRS rate, the self-employed deduct business miles at the rate on their return, and a volunteer deducts charity miles at 14 cents. An employer is free to pay a different rate, above or below the IRS figure, which is why the tool has a custom-rate option. Pay above the standard rate and the excess can become taxable; that is a matter for how the plan is set up.
What this does not cover
This multiplies miles by a rate. It does not decide whether your driving qualifies as deductible business or medical mileage, which turns on the trip's purpose and the tax rules, nor does it handle the actual-expense method, where you total real costs and depreciation instead of using the standard rate. Commuting from home to a regular workplace generally does not count. Whether a given trip qualifies, and whether the standard rate or actual expenses serves you better, is a question for a tax professional.
Log the miles as you drive them, because a contemporaneous record is worth far more than a reconstruction at tax time.
Frequently asked questions
What is the IRS mileage rate for 2026? The IRS business standard mileage rate is 76 cents per mile from July 1, 2026, raised from 72.5 cents in the first half of the year on rising fuel costs. Medical and moving is 23.5 cents, and the charity rate is fixed by statute at 14 cents. So 1,000 business miles reimburse at $760 under the current rate.
How is mileage reimbursement calculated? Multiply the miles driven by the rate per mile. At the 76 cent business rate, 1,000 miles is 1,000 times 0.76, or $760. The standard mileage rate is meant to cover the whole cost of driving, including fuel, maintenance, insurance, and depreciation, not fuel alone, which is why it is far higher than the gas cost of those miles.
Why did the 2026 rate change mid-year? The IRS raised the business rate from 72.5 to 76 cents effective July 1, 2026, a mid-year adjustment it makes only when driving costs move sharply, as it last did in 2022. So a trip in March 2026 reimburses at 72.5 cents and the same trip in August at 76 cents. This tool applies the current rate from July 1; enter a custom rate for an earlier period.
Can my employer pay a different rate? Yes, the IRS rate is a standard for tax deduction and a common benchmark, but an employer can reimburse at any rate it chooses. Paying above the IRS rate can make the excess taxable income, while paying below it may leave an employee able to deduct the difference in some cases. Use the custom rate option to match your own plan.
Is this a tax deduction or a reimbursement? The same standard rate underlies both, but they are used differently. An employer reimburses an employee tax free up to the IRS rate, while the self-employed and certain filers deduct business miles at the rate on their return. This tool computes the dollar figure; whether it is a reimbursement or a deduction, and how it is reported, is a question for a tax professional.