The IRS is raising the standard mileage rate by 1.5 cents per mile for 2024.
The agency on Dec. 14 announced that the business standard mileage rate per mile is rising to 67 cents, up from 65.5 cents for 2023, beginning Jan. 1.
In addition to the 67 cents per mile driven for business use, the IRS also announced the standard mileage rate for 2024 will be:
- 21 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces—a decrease of 1 cent from 2023.
- 14 cents per mile driven in service of charitable organizations. The rate is set by statute and remains unchanged from 2023.
These rates apply to electric and hybrid-electric automobiles, as well as gasoline and diesel-powered vehicles.
The boost in the standard mileage rate comes despite a recent decrease in fuel prices. Fuel prices spiked in summer 2022 and have fallen more than 20 percent since that time, according to Motus, a Boston-based mobile workforce management software firm. However, noted Motus CEO Phong Nguyen, at the same time, vehicle acquisition costs have risen slightly, while vehicle depreciation has also accelerated, meaning that the overall cost of vehicle ownership has also risen.
“There are many factors contributing to increased driving costs,” Nguyen said. “It’s important for business leaders to prioritize their mobile employees who depend on their cars for work by providing the best reimbursement methodologies for individual costs related to owning and operating a vehicle.”
The standard mileage rate is used to compute the costs that are deductible by businesses and self-employed individuals for operating an automobile for business use, as an alternative to tracking actual costs. Employers often use the standard mileage rate to pay tax-free reimbursements to employees who use their own vehicles for business.
[SHRM members-only HR Q&A: Do we have to reimburse personal auto mileage for business-related trips?]
The information about the mileage rate is detailed in IRS Notice 2024-08.