Mileage Reimbursement Calculator
Calculate your mileage reimbursement for business driving using the IRS standard rate (editable — it changes each January) or UK HMRC approved rates. Includes what counts as business miles and how to keep a claim-proof log.
Quick answer: Reimbursement = business miles × the standard rate. At the recent IRS rate of about 70¢/mile, 350 business miles reimburse ≈ $245, tax-free under an accountable plan with a mileage log. UK rates: 45p/mile for the first 10,000 miles, then 25p.
How Mileage Reimbursement Works
When you drive your personal vehicle for work, the standard mileage rate compensates the full cost of that mile — fuel, maintenance, tires, insurance, registration, and depreciation bundled into one per-mile figure. The IRS publishes a new rate every January (recently around 70¢ for business use; always confirm the current year at irs.gov and edit the rate above). Paid at or below the standard rate under an accountable plan — business purpose documented, log kept, excess returned — reimbursement is completely tax-free.
Formula
Reimbursement = Business Miles × Rate per Mile
Worked Examples
Example 1 — monthly claim. A sales rep logs 350 client-visit miles at a 70¢ rate: $245.00, tax-free with a proper log.
Example 2 — UK two-tier. A UK consultant drives 12,000 business miles in the tax year: (10,000 × 45p) + (2,000 × 25p) = £4,500 + £500 = £5,000. If her employer pays only 30p/mile (£3,600), she claims Mileage Allowance Relief on the £1,400 gap.
Example 3 — above-rate payment. An employer pays 80¢ when the IRS rate is 70¢: the 10¢ excess per mile is taxable wages on the paystub — a common payroll surprise.
What Counts as Business Miles
| Trip | Business miles? |
|---|---|
| Office to client site and back | Yes |
| Between two work locations in a day | Yes |
| Home to a temporary work site (not your regular office) | Generally yes |
| Errands for the employer (bank, supplies, post) | Yes |
| Ordinary home-to-office commute | No — never deductible or reimbursable |
| Personal detours during a business trip | No — log the business portion only |
Keeping a Claim-Proof Mileage Log
The IRS and HMRC both require contemporaneous records — logs created at or near the time of driving, not reconstructed at year-end. Each entry needs: date, start and end locations, business purpose, and miles. Odometer photos at year boundaries strengthen everything. Apps (MileIQ, Everlance, Driversnote) automate GPS capture, but a paper log or spreadsheet is equally valid. Audit reality: mileage is among the most-challenged deductions, and reconstructed logs are routinely disallowed — five minutes a week is cheap insurance.
Employer Rules: Who Must Reimburse
- US federal law: no general reimbursement requirement — but unreimbursed vehicle costs cannot push effective wages below minimum wage (an issue for delivery drivers).
- California, Illinois, Massachusetts: must reimburse necessary business expenses, including mileage — California Labor Code 2802 claims are common and successful.
- UK: employers aren't required to pay MAP rates, but employees can claim tax relief from HMRC on any shortfall below 45p/25p.
- Employees post-2017 (US): unreimbursed employee mileage is no longer federally deductible — if your employer doesn't reimburse, the money is simply gone, which strengthens the case for negotiating reimbursement into your role.
Standard Rate vs Actual Expenses (Self-Employed)
Self-employed drivers may instead deduct actual costs (fuel, repairs, insurance, depreciation × business-use %). Rule of thumb: high-mileage drivers of economical cars do better with the standard rate; low-mileage drivers of expensive vehicles may do better with actuals. Constraints: choose the standard rate in a car's first business year to keep switching rights, and leased vehicles must stick with one method for the lease term. Track both for a quarter, compare, and commit.
Special Rates and Cases
| Category | Treatment |
|---|---|
| Medical / moving miles (US) | Lower IRS rate (moving: military only post-2017) |
| Charity miles (US) | 14¢/mile — set by statute, unchanged for decades |
| Motorcycles (UK) | 24p/mile flat |
| Bicycles (UK) | 20p/mile flat |
| Passenger carrying colleague (UK) | +5p/mile per passenger |
| EVs | Same standard rate as petrol cars (US and UK MAP) |
Reimbursements ride along with your regular pay — see how the rest of the paycheck maths out with the payroll tax calculator, and if you're totaling a departure claim, add pending reimbursements into the final paycheck calculator.
Frequently Asked Questions
What is the current IRS mileage rate?
The IRS sets a new rate every January — recently about 70 cents per business mile. Check irs.gov for the current figure and update the editable rate in this calculator.
Is mileage reimbursement taxable?
Not when paid at or below the IRS/HMRC standard rate under an accountable plan with mileage logs. Amounts above the standard rate are taxable wages.
Does the mileage rate cover gas?
It covers everything: fuel, maintenance, tires, insurance, registration, and depreciation. You cannot claim fuel separately on top of the standard rate.
Do employers have to reimburse mileage?
US federal law does not require it (except where costs cut wages below minimum wage), but California, Illinois, and Massachusetts mandate expense reimbursement. UK employees can claim tax relief on any gap below HMRC rates.
Does commuting count as business miles?
No — home to your regular workplace is never business mileage. Trips between work sites, to client locations, and to temporary sites generally do count.
What records do I need for mileage claims?
A contemporaneous log: date, origin/destination, business purpose, and miles for each trip. GPS apps or a simple spreadsheet both work; reconstructed year-end logs fail audits.
What are the UK HMRC mileage rates?
45p per mile for the first 10,000 business miles in the tax year, 25p thereafter; motorcycles 24p, bicycles 20p, plus 5p per business passenger.
Should I use the standard rate or actual expenses?
Self-employed only: standard rate favors high-mileage economical cars; actual expenses can favor expensive, low-mileage vehicles. Use the standard rate in year one to preserve the choice.
Can employees deduct unreimbursed mileage?
Not on US federal returns since 2018 (with narrow exceptions like military reservists). If your employer will not reimburse, negotiate — the deduction fallback no longer exists.
Is there a different rate for electric vehicles?
No — EVs use the same standard business rate as petrol cars under both IRS and HMRC MAP rules.
✓ Formula verified • Last updated: July 10, 2026