IRS Mileage Rate Increased to 76¢ for 2026
If you track business mileage, or work with clients who do, there's an important update worth making today.
The IRS has increased the standard business mileage rate from 72.5 cents to 76 cents per mile, effective July 1, 2026.
While a 3.5-cent increase may not seem significant at first glance, it can add up over the course of a year for business owners, employees who are reimbursed for mileage, and anyone who drives regularly for work.
Who Should Use the New IRS Mileage Rate
This update matters if you:
Own a business and track business mileage.
Reimburse employees for work-related driving.
Work with clients who deduct or reimburse business mileage.
Use mileage-tracking software or expense reports.
If any of these apply to you, now is a good time to review your current reimbursement policies and ensure your systems reflect the new rate.
Why It Matters
Mileage reimbursement is about much more than the cost of gas. The IRS standard mileage rate is intended to reflect the overall cost of operating a vehicle for business use. This includes expenses such as fuel, maintenance and repairs, tires, insurance, registration, and depreciation.
By keeping your reimbursement rate up to date, you can help ensure employees are reimbursed fairly, business expenses are calculated accurately, and your records remain aligned with current IRS guidance.
Action Items
Before your next payroll or expense reimbursement cycle, take a few minutes to update your mileage reimbursement rate to 76¢ per mile for business travel on or after July 1, 2026. It's also a good idea to review your payroll, accounting, and expense management systems to ensure they're using the new rate.
Be sure to notify employees, or clients ,who regularly submit mileage. Don’t forget to update any spreadsheets, templates, or mileage tracking tools you use. Making these small adjustments now can help prevent reimbursement errors and keep your business records accurate and compliant.
Small Updates Can Have a Big Impact
Tax and IRS updates don't always make headlines, but they can have a meaningful impact on day-to-day business operations. Staying informed helps you avoid administrative headaches and keeps your financial processes running smoothly.
If you or your clients track business mileage, consider this your friendly reminder to make the update.
Credit to Jenna Lee Dillon for sharing this update through her Gutsy Money newsletter.
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