Mileage Reimbursement Calculator
Calculate employee mileage reimbursement using the 2026 IRS rate — 72.5¢ per mile January–June, 76¢ July–December — or your employer's custom rate, and see exactly how much is tax-free and how much counts as taxable wages.
Reviewed by Slava Akulov, CEO & Co-Founder at Jupid · Last updated: August 2026
Miles driven for work in a personal vehicle (commuting doesn't count)
The IRS raised the 2026 rate mid-year (Announcement 2026-11 applies to this period)
Total Reimbursement
$380.00
500 miles × $0.76
Tax-Free Portion
$380.00
under an accountable plan
Reimbursing yourself from your own business?
Jupid's AI accountant tracks owner mileage, sets up accountable-plan records, and finds every deduction.
Breakdown
Assumes an accountable plan with a proper mileage log. IRS rates verified August 2026 (Notice 2026-10 and Announcement 2026-11). Verify current rates on irs.gov.
How This Calculator Works
Enter your miles
Business miles driven in your personal vehicle — client visits, job sites, errands between work locations. The commute from home to your regular workplace never qualifies.
Pick the rate
The IRS rate for the period is the default: 72.5¢ for January – June 2026, 76¢ for July – December. If your employer uses its own cents-per-mile rate, enter that instead.
See tax-free vs. taxable
The calculator splits your reimbursement into the tax-free portion (at or below the IRS rate) and any excess that counts as taxable wages.
Employee Mileage Reimbursement Rules in 2026
Most employers reimburse employee driving at the IRS standard mileage rate, which is split in 2026: 72.5¢ per mile for January 1 – June 30 (IRS Notice 2026-10) and 76¢ per mile for July 1 – December 31 (Announcement 2026-11, a mid-year increase driven by fuel prices). The rate is designed to cover the full cost of operating a vehicle — gas, maintenance, insurance, and depreciation — so a single per-mile payment settles everything. See the full IRS mileage rate 2026 reference for every category and 12 years of history.
The tax treatment hinges on the accountable plan rules in IRS Publication 463. A reimbursement is tax-free when three tests are met: the miles have a business connection, the employee substantiates them with a timely mileage log (date, destination, business purpose, miles), and any excess advance is returned within a reasonable time. Meet all three and reimbursement up to the IRS rate never touches the W-2:
| Scenario | Tax treatment |
|---|---|
| Accountable plan, at or below the IRS rate | Tax-free to the employee; deductible for the employer |
| Accountable plan, above the IRS rate | Excess over the IRS rate is taxable wages (W-2, withholding, FICA) |
| Non-accountable plan (e.g., flat car allowance, no log) | Entire payment is taxable wages |
A mileage log is what keeps the reimbursement tax-free — use an IRS-compliant mileage log template or a tracking app that captures the required fields.
Do Employers Have to Reimburse Mileage?
No federal law requires mileage reimbursement.The Fair Labor Standards Act only intervenes when unreimbursed vehicle expenses effectively drop a worker's pay below minimum wage — a real issue for low-wage delivery drivers, but not most employees. The IRS rate is a tax ceiling, not a labor-law floor.
Three states are the notable exceptions. California(Labor Code §2802), Illinois (Wage Payment and Collection Act), and Massachusetts (454 CMR 27.04) require employers to reimburse necessary business expenses, including personal vehicle use for work. Courts and regulators in those states generally accept the IRS standard mileage rate as a reasonable measure of vehicle costs, which is why most multi-state employers simply adopt it.
One thing employees often miss: since 2018, W-2 employees cannot deduct unreimbursed mileage on a federal return — the miscellaneous itemized deduction was suspended by the 2017 tax law and later made permanent. If your employer pays less than the IRS rate (or nothing), there is no federal tax remedy for the gap. Self-employed workers are different: they deduct business miles directly on Schedule C using the mileage deduction calculator.
FAVR Plans: The Fixed-and-Variable Alternative
Larger employers sometimes replace cents-per-mile reimbursement with a FAVR (Fixed and Variable Rate) plan, an IRS-sanctioned method that pays a fixed monthly amount for ownership costs (insurance, depreciation, registration) plus a variable per-mile amount for fuel and maintenance, both calibrated to the employee's territory and a benchmark vehicle. Administered under the IRS's FAVR requirements, the payments are tax-free even though they don't match the standard mileage rate — often more accurate than a flat per-mile rate for employees who drive 5,000+ business miles a year, at the cost of significantly more administration.
What's Included
2026 IRS Rates Built In
Both halves of the split year — 72.5¢ and 76¢ — plus 2025, sourced from Notice 2026-10 and Announcement 2026-11.
Custom Employer Rates
Model any cents-per-mile policy, above or below the IRS rate, and see the difference instantly.
Tax-Free vs. Taxable Split
Accountable-plan math applied automatically: what stays off the W-2 and what counts as wages.
State Law Notes
Where reimbursement is actually required — California, Illinois, and Massachusetts — and what applies everywhere else.
Why Use This Calculator
For employees
Check whether your expense report is right, whether your employer's rate keeps up with the IRS benchmark, and what any excess means for your W-2.
For employers
Set a defensible per-mile rate, budget reimbursements for the 2026 split-year rates, and avoid accidentally creating taxable wages.
For owner-employees
S corp owners reimburse themselves through an accountable plan — this shows the exact tax-free amount the business can pay for your miles.
Frequently Asked Questions
Official References
- IRS: Standard Mileage Rates
Official current and historical mileage rates, including the 2026 split-year rates from Notice 2026-10 and Announcement 2026-11.
- IRS Publication 463
Travel, Gift, and Car Expenses — accountable plan rules, substantiation requirements, and reimbursement treatment.
- IRS Announcement 2026-11 (IRB 2026-29)
Mid-year 2026 rate increase to 76¢ per mile effective July 1, 2026.
- IRS Publication 15 (Circular E)
Employer's Tax Guide — payroll treatment of accountable and non-accountable expense reimbursements.
This calculator provides estimates based on IRS rates verified August 2026 and assumes an accountable plan with proper substantiation. State reimbursement laws vary. Consult a tax professional for advice on your specific situation.
Let Jupid handle the books and taxes for you
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