The IRS has announced a midyear increase to the standard business mileage reimbursement rate, giving employers a new rate to use when reimbursing employees who drive their personal vehicles for work.
Beginning July 1, 2026 (retroactively), the standard mileage rate for business travel increased from 72.5 cents per mile to 76 cents per mile. Although the announcement was made on July 13, 2026, the updated rate applies to eligible business miles driven on or after July 1.
The IRS standard mileage rate is commonly used to reimburse employees who use their personal vehicles for business purposes, such as traveling to client meetings, visiting job sites, or completing other business-related errands.
While private employers are generally not required to use the IRS standard mileage rate, many choose to adopt it because it provides a simple and widely recognized method for calculating employee reimbursements.
If your company already uses the IRS rate for mileage reimbursement, now is the time to review your process and make any necessary updates.
Employers using the IRS standard mileage rate should:
Payroll requirements and employer responsibilities can change throughout the year. Staying informed and updating your processes promptly helps ensure employees are reimbursed accurately and your business remains prepared for regulatory updates.
If you have questions about how this mileage rate change may impact your payroll or reimbursement procedures, the Alloy Silverstein team is available to help.
Empowering business owners and individuals in South Jersey and Philadelphia to feel confident through proactive accounting and advisory solutions.
