The IRS is raising the standard mileage rate by 3 cents per mile for 2025.
The agency on Dec. 19 announced that the business standard mileage rate per mile is rising to 70 cents, up from 67 cents for 2024, beginning Jan. 1.
However, the mileage rates for vehicles used for other purposes will stay unchanged from this year, according to the IRS:
- 21 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces—unchanged from 2024.
- 14 cents per mile driven in service of charitable organizations. The rate is set by statute and remains unchanged from 2024.
The rates apply to electric and hybrid-electric automobiles, as well as gasoline- and diesel-powered vehicles.
The boost in the standard mileage rate comes as costs to buy a car and own a car have increased in the past year, with auto insurance, maintenance, and repair costs all rising year over year, according to Motus, a Boston-based mobile workforce management software firm.
However, fuel prices in 2024 have been down compared to 2023, noted Motus CEO Phong Nguyen.
“So many factors continue to impact driving costs in significant ways,” Nguyen said. “It’s essential for business leaders to support their employees who drive as a part of their job—and rely on their vehicles for work—by implementing fair and accurate reimbursement strategies while also optimizing reimbursement spend and mitigating waste and risk.”
Use of the standard mileage rate is optional because taxpayers can calculate the actual costs of using their vehicle rather than using the standard mileage rates, according to the IRS.
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 2025-05.
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