The IRS announced that the business standard mileage rate for transportation expenses paid or incurred beginning January 1, 2026, will be 72.5 cents per mile, up 2.5 cents from 70 cents per mile for 2025 [Notice 2026-10, 12-29-25].
Vehicles Put Into Service in 2026
For vehicles put into service in 2026, the cents-per-mile valuation method and the fleet-average valuation rule can be used only if the vehicle does not have a fair market value of more than $61,700 ($61,200 in 2025).
Make Sure to Use the Correct Rate
Because of the increase of 2.5 cents in the business standard mileage rate, employers reimbursing employees at the 2025 rate need to be mindful of the rate change. Employers should make sure they change to the 2026 rate for all affected travel on or after January 1, 2026. And remember that business miles driven in December 2025 that show up on an employee’s expense report in 2026 are governed by the rules applicable to the corresponding 2025 mileage rate.
To learn more about federal and state laws, regulations, and information to keep your company’s payroll operations in compliance, check out Payroll Source Plus!
Laura Lough, Esq., is Senior Director of Publications for PayrollOrg.
