Business miles × the IRS rate — reimbursements, invoicing, and whether the rate covers your car
| Your true cost per mile | Amount |
|---|
The IRS standard mileage rate — $0.70/mile for 2026 — is the number that settles three recurring money conversations: what employers reimburse, what freelancers invoice clients for travel, and what the self-employed deduct. It's a safe harbor (reimburse at it, tax-free, no receipts beyond a log) and a fairness benchmark (it approximates the full cost of running a car, not just gas). This calculator runs the reimbursement math and — the part people never check — whether the rate actually covers your vehicle.
| You are… | The rule |
|---|---|
| Employee driving for work | Reimbursement at ≤ the IRS rate is tax-free to you and deductible to the employer. Unreimbursed miles deduct NOTHING (W-2 deduction suspended) — the ask-your-employer conversation is your only lever, and this calculator arms it |
| Employer / manager | The safe harbor makes ≤$0.70/mi the frictionless policy: no taxable-wage mess, one log requirement. FAVR plans (fixed-and-variable) suit big fleets; the standard rate suits everyone else |
| Freelancer invoicing travel | Bill mileage as a line item at the IRS rate — the universally-accepted convention clients don't argue with. Then ALSO deduct the miles on your Schedule C (the invoice is income; the deduction is yours — see the Mileage Deduction tool) |
The rate blends fuel (~11¢), maintenance/tires (~10¢), insurance/registration share (~10¢) and depreciation (~15–25¢) for a national-average vehicle. The margins are honest but uneven: efficient used sedans profit at the rate (~15–25¢/mile over true cost); new trucks and luxury SUVs run at or above it (their depreciation alone can hit 30¢/mile). Heavy business drivers choosing a vehicle should read the calculator's cost table as a procurement guide — the boring Camry is a per-mile profit center.
Every use case shares one requirement: date, destination, purpose, miles — contemporaneous. Apps automate it; the Mileage Deduction tool covers the tax-side rules (commuting never counts; home-office changes what counts) in depth.
Federally, no (except where unreimbursed costs would drop pay below minimum wage); CA, IL and MA require reimbursement of necessary business expenses including mileage. Everywhere else it's policy and negotiation — armed with this calculator's annualized figure.
Reimbursement below the rate is still tax-free; you simply eat the gap (and can't deduct it as a W-2 employee). Above the rate, the excess is taxable wages. The rate is a ceiling for tax-free treatment, not a mandate.
You can charge anything the contract allows — the IRS rate is just the convention clients accept without receipts. Above it, expect pushback or provide justification (large vehicle, equipment hauling).
Home to a REGULAR workplace: never. Home to a client site: yes for the self-employed with a home office; for employees, employer policy governs what's reimbursable (many pay only miles beyond the normal commute).
Fixed And Variable Rate — employers pay a fixed monthly amount (insurance, depreciation share) plus a per-mile fuel rate, matched to your region and vehicle profile. More accurate than the flat rate for high-mileage fleets; overkill below ~5,000 business miles/yr.
An annual study of fixed and variable vehicle costs (fuel, insurance, depreciation, maintenance). It moved from $0.655 (2023) → $0.67 (2024) → $0.70 (2025-26). Mid-year adjustments happen after fuel shocks (2022's did).
Yes — every figure computes locally in your browser.
Log the miles, invoice or claim at the rate, and drive something the rate flatters. For 10,000 business miles a year, the difference between 'never tracked' and 'properly reimbursed' is $7,000 — the highest-paid paperwork in your car.