The IRS Mileage Rate Explained

The IRS mileage rate, also known as the federal mileage rate, is calculated each year. The IRS usually publishes the new rates at the end of December or the beginning of January. 

The rate represents the maximum rate per mile an employer can reimburse their employees at, without it being subject to tax. A self-employed individual can also use it to claim business mileage deductions on their taxes.

If you’re here to find out what the current mileage rates are, feel free to head straight there. 

How is the IRS mileage rate calculated

Each year's mileage rate is based on an examination of the previous year's costs of owning and driving a vehicle in the U.S.

According to the IRS, "the standard IRS mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs." 

Also read: Medical and Charity Mileage Rates

Examples of variable costs include gas, oil changes, parking, tire changes, getting a new battery, and other necessary components. 

Fixed costs include – among others – insurance, license, registration fee, and taxes.

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What does the IRS mileage rate cover

The IRS mileage rate is calculated to cover all expenses of owning and running your motor vehicle, but only for business purposes. 

Some of these costs include:

• Leasing payments
• Insurance
• Vehicle tax
• Maintenance of your vehicle
• Gas and oil
• Car tyres

The federal mileage rates for 2025

• 70 cents per mile for business miles
• 21 cents per mile for medical and moving purposes
• 14 cents per mile in the service of charitable organizations

The federal mileage rates for 2024

• 67 cents per mile for business-related driving
• 21 cents per mile for medical and moving purposes
• 14 cents per mile for charity-related miles

The federal mileage rate for previous years

How to use the IRS mileage rate

Use the IRS mileage rate to receive mileage reimbursement or deductions for the business-use portion of driving your vehicle.

As an employee

The most common way for companies to reimburse employees for business-related driving is through the federal mileage rate. Each month, you report the business mileage you’ve driven and receive reimbursement equal to the IRS mileage rate for each mile. You can find out more about employee mileage reimbursement in our other guide. 

It might also be worth calculating your mileage reimbursement to see how much you could claim. 

As a self-employed

As a self-employed individual, you can deduct your self-employed business mileage expenses from your annual tax return. Using the mileage rate set by the IRS, calculate the business mileage you’ve driven throughout the year you’re claiming for and multiply by that year’s set government mileage rate.

Here’s a simple example of what that could look like:

Tracking your mileage and keeping records

In order to apply the mileage rate for reimbursements or deductions, you must first track and log all of your business driving to be able to separate it from personal trips. 

You can try using a manual solution, such as a notebook or a spreadsheet; for automatic tracking and easy classification of all your trips, a mileage tracking app might be a good option to consider. 

With accurate records of your business driving, you’ll be able to report it to your employer or the IRS in case you get audited. 

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