Mileage Allowance 2026 – Will It Be Increased?
The mileage allowance for grey fleet drivers hasn’t increased in 15 years. Find out what they are, whether we’re likely to see a rise and how to support your drivers.
anthonyjones.comHere’s the latest on mileage allowances for 2026 and how it could affect you.
Direct answer
- In 2026, the standard mileage rate for business use in the U.S. is 72.5 cents per mile, up from 70 cents in 2025. This increase is intended to reflect higher vehicle costs and inflation. [source: IRS Notice 2026-10 and related press coverage]
- The IRS also kept other mileage rates in 2026 the same or adjusted them slightly: medical/moving mileage rates are typically lower (about 20.5 cents per mile for medical or moving purposes, with moving rate limited to certain qualifying individuals), and charitable mileage remains at 14 cents per mile.
- For employers using fixed-and-variable or cents-per-mile valuation methods for employer-provided vehicles, the maximum FMV for applying certain valuation rules rose modestly to 61,700 (from 61,200).
- In addition, employers offering transportation benefits can exclude up to $340 per month from an employee’s income for transit, parking, or commuter benefits in 2026.
Key details by topic
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General business mileage rate
- 2026 rate: 72.5 cents per mile (up from 70 cents in 2025) to account for updated cost data. This is the rate many employers use for reimbursements or expense deductions when employees use their own vehicle for work.
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Other mileage categories
- Medical purposes: 20.5 cents per mile (down by 0.5 cents from 2025). Applicable to specified scenarios and uses.
- Moving purposes: 20.5 cents per mile (also applicable only to eligible active-duty military or certain intelligence-community members under specific rules).
- Charitable driving: 14 cents per mile (unchanged, as set by statute).
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Employer-provided vehicles (FMV/valuation)
- For vehicle valuation methods used to compute personal use costs, the maximum fair market value (FMV) for vehicles first made available to employees increased to 61,700 in 2026.
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Transportation benefits
- Employers can exclude up to $340 per month from an employee’s income for qualifying transportation benefits (commuter rail/vanpool, transit passes, and qualified parking).
What this means for you (practical tips)
- If you reimburse employees for business driving, update your reimbursement policy to reflect 72.5 cents per mile for 2026. This helps ensure compliance and accurate expense accounting.
- If you’re tracking different mileage categories, review your rates for medical, moving, and charitable driving to ensure you apply the correct rates where eligible.
- If you manage employer-provided vehicles, verify your valuation calculations use the 61,700 FMV cap for 2026 under the applicable rules.
- If you offer transit or parking benefits, confirm the monthly exclusion remains at $340 for 2026 and adjust payroll deductions accordingly.
Would you like a concise summary tailored to your location (Buffalo, NY) and your specific situation (employee reimbursement policy, fleet management, or tax planning)? I can also pull a quick side-by-side comparison table of 2025 vs 2026 rates for easy reference.