How to Calculate Mileage Reimbursement

Mileage reimbursement is simple math that is easy to get slightly wrong. The formula is miles driven times a rate per mile. The work is choosing the right rate for the dates and purpose of the trip, and keeping a log someone else can follow.

If you want the number first, use the free mileage reimbursement calculator. It multiplies miles by a per-mile rate and ships with the official 2026 IRS optional standard mileage rates already filled in. This article walks through the same formula by hand.

What mileage reimbursement actually pays

When you reimburse someone for business driving, you are not paying for gasoline alone. A per-mile rate is a bundle: fuel, ordinary maintenance, insurance, and wear. That is why a cents-per-mile figure is useful for a small business. You do not have to collect every receipt from a personal car to pay a contractor, an employee, or yourself as an owner-operator.

Reimbursement and a tax deduction are related but not the same thing. This post is a calculation guide, not tax advice. If the dollars are large or the facts are messy, ask a CPA.

The formula

Reimbursement = miles driven × rate per mile

That is the entire calculation. Three details matter more than the arithmetic:

1. Count only the miles that belong to the purpose you are paying for. Commute miles between home and a regular workplace are usually personal. A trip from the office to a client site is business. A mixed day needs a split, not a guess.
2. Use the rate that matches the purpose and the dates. Business, medical or qualifying moving, and charity each have their own official figures, and 2026 has two business rates depending on when the miles were driven.
3. Keep the inputs. A clean reimbursement is miles you can point to, a rate you can name, and a date.

If a trip spans two rate periods, split the miles by date and apply each period's rate. Do not average the two rates unless your own written policy says to do that and you understand the difference.

Which rate to use, and how to find the current one

Many U.S. small businesses start with the IRS optional standard mileage rates. The IRS updates the table when the year changes — and, some years, mid-year when fuel costs move.

For 2026, the official IRS standard mileage rates page lists two business periods (IR-2025-128 for January 1–June 30, and IR-2026-29 for July 1–December 31):

• Business use, January 1–June 30, 2026: 72.5 cents per mile
• Business use, July 1–December 31, 2026: 76 cents per mile
• Medical, or qualifying military moving: 20.5 cents per mile through June 30, 2026, and 23.5 cents per mile from July 1, 2026
• Charity: 14 cents per mile for the full year (this figure is set in the tax code and does not move with fuel)

Confirm the current table before you pay anyone. The IRS keeps it at Standard mileage rates. When next year arrives, or if the IRS issues another mid-year update, that table is the source of truth — not a blog post or a spreadsheet from last spring.

You do not have to use the IRS figures. Some employers set a company rate in a written policy. If you use your own rate, write it down, date it, and apply it consistently. The calculator still works: enter miles and the rate you actually pay.

Worked example: a week of client visits

Imagine a solo consultant who drives a personal car to client sites in August 2026. The log for one week looks like this:

• Monday: office to Client A and back — 42 business miles
• Tuesday: office to Client B, then to Client C, then back — 68 business miles
• Wednesday: work from the office, no driving
• Thursday: office to Client A for a follow-up — 42 business miles
• Friday: home to a networking breakfast, then to the office. The breakfast is business; the usual home-to-office commute is not. Extra miles beyond the normal commute: 18

Business miles for the week: 42 + 68 + 42 + 18 = 170

August 2026 is in the second half of the year, so the IRS business rate on the official table is 76 cents per mile.

Reimbursement = 170 × 0.76 = $129.20

That is the number you would pay if your policy follows the IRS business rate for the dates driven. Plug the same 170 miles and $0.76 into the mileage reimbursement calculator and you should see $129.20.

Now change one fact. Suppose 40 of those miles were driven in June 2026 on a trip that was invoiced late, and 130 were driven in August. Do not apply 76 cents to all 170 miles.

• June miles: 40 × 0.725 = $29.00
• August miles: 130 × 0.76 = $98.80
• Total: $127.80

The split is only $1.40 in this small example. On a quarter of field work it is not small. Date the miles, then pick the rate.

A second pass: medical, moving, and charity miles

The same formula applies when the purpose is not business. Only the rate changes.

Suppose a staff member drives 80 miles in September 2026 for a charitable event the company is supporting, and your policy reimburses charity miles at the IRS charity rate. Charity is 14 cents per mile.

80 × 0.14 = $11.20

That is much lower than the business rate on purpose. The charity figure is fixed in statute. Do not substitute the business rate because "they were in the car for work-adjacent reasons" unless the trip was actually business driving under your policy.

Medical and qualifying moving miles use the medical/moving column on the IRS table for the dates driven — 20.5 cents in the first half of 2026 and 23.5 cents in the second half. If you are not sure which column applies, read the IRS page and your policy before you pay.

What to write down so the number holds up

A reimbursement that survives a question looks boring on paper. For each trip, capture:

• Date (and, if a trip crosses a rate change, the miles on each side of the change)
• Purpose in one line: who you saw, or why the drive was business, medical, or charity
• Start and end points, or a route that a reviewer can follow
• Miles. Odometer readings are clearer than a round number you guessed at the end of the month
• Rate used, and where it came from (IRS period, contract, or company policy)
• Who is being paid

A shared sheet is enough if the columns stay the same. If several people drive every week, agree on the columns once.

Common mistakes

Mixing commute and business miles. If someone drives from home to a client and then to the office, only the extra miles beyond the normal commute belong in the business bucket — unless your written policy says otherwise.

Using last year's rate in January. Check the official page when the year turns, and again after any mid-year update.

Applying one rate to a year that has two business rates. 2026 is one of those years. Split by date.

Paying the business rate for charity or medical miles "to be nice" without calling it a company policy.

Skipping the log because the calculator already did the math. The calculator multiplies. It does not prove the miles existed.

Treating the IRS rate as a required wage. It is an optional substantiation method. Your policy can use a different number.

When actual costs may be a better fit

Cents-per-mile is a shortcut. Prefer actual costs when the vehicle is unusual or you already keep complete expense records. Do not mix a cents-per-mile reimbursement and a full actual-cost reimbursement for the same miles. Switching methods can have tax-method limits — ask a CPA before you change.

Related tools

If mileage is one piece of how you price or pay people, two other free tools on this site use the same "show the math" approach:

• The billable hours calculator turns available hours, utilization, and rate into a revenue or target-rate figure.
• The commission calculator handles sales × rate with an optional quota and accelerator.

Neither replaces a mileage log. They help when you are setting pay or pricing around the same people who drive.

Calculate the next reimbursement

Open the mileage reimbursement calculator, enter the miles from your log, and choose the purpose that matches the dates. If your policy uses a company rate, type that rate in. Confirm the IRS figures on the official standard mileage rates page whenever you start a new year or a new rate period.

Miles times rate is easy. Dating the miles and naming the rate is the part that keeps the payment clean.