IRS Raises 2026 Business Mileage Rate to 76 Cents

The Rate Changed Midyear

The Internal Revenue Service raised the optional 2026 standard business mileage rate to 76 cents per mile for travel on or after July 1, 2026, up from 72.5 cents for the first half of the year.

The IRS said the change modifies its earlier 2026 mileage notice and stems from recent increases in fuel prices. Automotive Fleet noted that the 3.5-cent increase is unusual: only the fifth midyear mileage-rate adjustment since 2000.

What Changed for Drivers

The IRS rate table now lists 76 cents per mile for business use from July 1 through Dec. 31, while the medical and military moving rate rises to 23.5 cents per mile. The charitable mileage rate remains 14 cents per mile, which is fixed separately under federal tax law.

The new business rate applies to deductible transportation expenses paid or incurred on or after July 1 and to qualifying mileage allowances paid to employees for transportation expenses incurred on or after that date. The earlier 72.5-cent rate still applies to mileage before July 1.

Why Fleets Need a Policy Check

The IRS rate does not force employers to reimburse every driver at 76 cents per mile. But organizations that use it as a benchmark for company travel, employee-owned vehicle programs, or grey-fleet reimbursement need to decide whether to adopt the new rate immediately, phase it in, or use a different method.

That decision matters because fuel is not the only cost in a reimbursement program. Insurance, depreciation, maintenance, financing, geography, and vehicle type can move differently from pump prices. For fleet teams, the practical takeaway is to review reimbursement rules, payroll timing, and driver communication before July mileage turns into expense reports.