Mileage Reimbursement Calculator 2026: IRS Rate vs Your Car's Cost
To calculate 2026 mileage reimbursement at the IRS rate, split your business miles at June 30: miles driven before July 1 are worth 72.5 cents each, and miles on or after July 1 are worth 76 cents each, because the IRS raised the business rate midyear. Multiply each half by its rate, add parking and tolls at their actual cost, and that is the total. In the illustrative example below, 8,500 business miles come to $6,500.00. Whether that number actually pays for your car is a separate question, and the answer depends more on how many miles you drive than on the rate.
The formula
- Reimbursement = miles before July 1 x $0.725 + miles on or after July 1 x $0.760 + business parking and tolls
- Your full cost per mile = (value the car loses a year + insurance + maintenance + registration + loan interest + fuel) / all miles a year
- Does the rate cover it? = rate per mile - your full cost per mile
In a spreadsheet, put the two mileage totals in B1 and B2, the two rates in
C1 and C2, and parking and tolls in B3; the first line is then
=B1*C1+B2*C2+B3. Keeping the rates in their own cells rather than inside
the formula means a future rate change is one edit.
The 2026 IRS mileage rate: two rates, one year
The IRS set the 2026 business standard mileage rate at 72.5 cents a mile in newsroom release IR-2025-128 (December 29, 2025). In IRS Announcement 2026-11, published in Internal Revenue Bulletin 2026-29 (July 13, 2026), it raised the business rate to 76 cents a mile for miles driven on or after July 1, 2026. The IRS standard mileage rates table lists both. The increase is 3.5 cents a mile, and it applies only to the second half of the year.
Worked example: 8,500 business miles in 2026
These miles and the parking figure are illustrative.
| Period | Business miles | Rate | Amount |
|---|---|---|---|
| Jan. 1 - June 30 | 4,000 | 72.5 cents | $2,900.00 |
| July 1 - Dec. 31 | 4,500 | 76 cents | $3,420.00 |
| Parking and tolls | actual cost | $180.00 | |
| Total | 8,500 | $6,500.00 |
The blended rate on these miles is $0.7435 - between the two official rates because the year is split. Running every mile at 72.5 cents would leave out $157.50, the increase on the 4,500 second-half miles. If your log is one total for the year, split it at June 30 before you multiply.
Commuting miles come out first
Before any rate is applied, the miles have to be business miles. IRS Publication 463 is direct about it: “You can’t deduct commuting expenses no matter how far your home is from your regular place of work.” Say an illustrative work-day log shows 9,800 miles, and 220 of those days included a 24-mile round trip between home and your regular workplace. That is 5,280 commuting miles. Taking them out leaves 4,520 business miles, worth $3,435.20 at 76 cents. Claiming the whole log would have come to $7,448.00, overstated by $4,012.80. Trips between work locations and trips to a temporary work site follow their own rules in Publication 463.
Does the mileage rate cover your car?
The IRS rate is one number for every car. Your car has its own cost per mile. Here is an illustrative car, driven 12,000 miles a year:
| Cost of the example car | A year |
|---|---|
| Value lost ($30,000 paid, $14,000 resale, 5 years) | $3,200.00 |
| Insurance | $1,600.00 |
| Maintenance and tires | $900.00 |
| Registration and fees | $300.00 |
| Loan interest | $700.00 |
| Fuel (12,000 miles / 30 mpg x $3.30) | $1,320.00 |
| All in | $8,020.00 |
| Per mile, over 12,000 miles | $0.668 |
At 12,000 miles a year this car costs $0.668 a mile all in. The second-half IRS rate of 76 cents covers that, with $0.092 a mile to spare.
Now say an employer or client pays 60 cents a mile instead - a rate that is illustrative, not a market figure. Against the full cost it falls $0.068 a mile short, which is $410.00 over 6,000 business miles. But the car’s running cost - fuel at $0.110 a mile plus maintenance at $0.075 - is only $0.185 a mile, and 60 cents clears that by $0.415. Which comparison is fair depends on one question: would you own and insure this car anyway? If yes, the running cost is what business miles add. If the car exists for the work, the full cost is what the rate has to pay.
The insight: your miles decide it, not the rate
Most of the example car’s cost does not depend on how far it goes. Value lost, insurance, maintenance, registration and interest come to $6,700.00 a year in this model whether the car does a short year or a long one; only fuel grows with the miles. So the same car has a very different cost per mile at different mileage:
| Miles a year | Car cost a year | Full cost per mile | Against 76 cents |
|---|---|---|---|
| 6,000 | $7,360.00 | $1.227 | short $0.467 |
| 9,000 | $7,690.00 | $0.854 | short $0.094 |
| 12,000 | $8,020.00 | $0.668 | covered |
| 15,000 | $8,350.00 | $0.557 | covered |
| 20,000 | $8,900.00 | $0.445 | covered |
Holding everything else as entered, a rate of 76 cents a mile covers this car’s full cost from about 10,308 miles a year upward. Below that, the per-mile cost climbs fast: $1.227 a mile at the low end of the table, against $0.445 at the high end. A rate that more than pays a long-distance driver can leave a low-mileage driver short in the same car.
Two cautions on this table. It holds the resale value fixed, but a car driven more miles sells for less, so the high-mileage rows are a little flattering. And maintenance is entered as a yearly figure, when more miles mean more of it. Put your own figures in for both.
Three more things the reimbursement amount does not show:
- How it is paid. Per IRS Publication 463, under an accountable plan an allowance at or below the federal rate is not included in box 1 of your Form W-2; under a nonaccountable plan, your employer reports the total in box 1. The same dollars can arrive taxed or untaxed.
- Your employer’s rate. The IRS rate is a federal benchmark, not a rule that an employer has to pay it. Policies can use a different rate, or one rate for the whole year.
- Choosing a method for your own car. If you deduct vehicle costs yourself, Publication 463 says that to use the standard rate for a car you own you “must choose to use it in the first year the car is available for use in your business.”
How these were calculated
Reimbursement is miles before July 1 times 72.5 cents, plus miles on or after July 1 times 76 cents, plus parking and tolls. The rate of 72.5 cents is from IRS newsroom release IR-2025-128; the rate of 76 cents is from IRS Announcement 2026-11 in Internal Revenue Bulletin 2026-29, and the IRS standard mileage rates page lists both periods. The commuting and accountable-plan rules are quoted from IRS Publication 463. Full cost per mile is (purchase price - expected resale) / years kept, plus insurance, maintenance, registration, loan interest and fuel (miles / mpg x fuel price), divided by miles a year; running cost per mile is fuel per mile plus maintenance per mile.
Every figure on this page was computed twice - once by the code behind the calculator pack below, once by a separate implementation written from the formulas - and the two agree to the cent. The miles, car price, resale value, insurance, fuel price, offered rate and log are illustrative, not published averages or figures for any real car. None of this is financial, legal or tax advice; for your own return, a tax professional and the IRS instructions are the authorities.
If you want to run this on your own car and your own log - the midyear split, standard rate against actual expenses, your real cost per mile, commuting miles, a trip log, gig earnings per hour and a car allowance against per-mile pay - the pack below does it in linked spreadsheets with every formula visible.