global Tax IRS Increases Standard Mileage Rates for the Remainder of 2026: What Businesses Need to Know July 21, 2026 Attention drivers…due to rising fuel costs the IRS has increased standard mileage rate for the rest of the year. Here’s what you should know. Quick Takeaways The IRS increased the standard mileage rate for business travel to 76 cents per mile, effective July 1, 2026. Medical and moving mileage rates also increased to 23.5 cents per mile. The charitable mileage rate remains unchanged at 14 cents per mile, as it is set by law. Businesses should update reimbursement policies and payroll systems to reflect the new rates for travel on or after July 1. Why the change?The adjustment comes in response to rising fuel costs. According to the American Automobile Association (AAA), the average price of regular gasoline increased from $2.82 per gallon in January to $3.89 per gallon by mid-July, a nearly 38% increase.Because the standard mileage rate is intended to approximate the cost of operating a vehicle (including fuel, maintenance, depreciation, insurance, and other expenses), the IRS periodically reviews economic conditions and makes adjustments when warranted.Why it mattersAlthough mileage rates don't always make headlines, they can have a meaningful impact on businesses with employees who travel frequently. Updating your reimbursement policies promptly can help ensure compliance while fairly reimbursing employees for rising vehicle operating costs.What are the changes for the remainder of 2026?For travel occurring on or after July 1, 2026, the standard mileage rates for the use of a car, van, pickup, or panel truck are:76 cents per mile driven for business use, up from 72.5 cents per mile in early 2026.23.5 cents per mile driven for medical purposes, up from 20.5 cents per mile in early 202623.5 cents per mile driven for moving purposes for certain active-duty members of the Armed Forces (and now certain members of the intelligence community), up from 20.5 cents in early 2026.14 cents per mile driven in service of charitable organizations, unchanged from the last update.These rates apply to gasoline, diesel, hybrid, and fully electric vehicles.What does this mean for businesses?Does your business reimburse employees for business travel using the IRS standard mileage rate? Now is the time to review your reimbursement policies. Employers should ensure that:Mileage reimbursement systems are updated for travel beginning July 1.Payroll and expense reporting software reflects the new rates.Employees understand which mileage rate applies based on the date travel occurred. Businesses that maintain accurate mileage records can continue using the IRS standard mileage rate instead of tracking actual vehicle expenses, simplifying recordkeeping while providing a tax-efficient reimbursement method.
