IRS Increases Business Mileage Rate to 76 Cents Per Mile

The IRS announced yesterday that the standard business mileage rate has increased from 72.5 cents to 76 cents per mile, retroactively effective July 1, 2026.

As a reminder, the IRS standard mileage rate is generally a tax standard, not a mandatory reimbursement rate under federal law. Employers may reimburse employees at a different rate, depending on applicable state law and company policy. For private employers in Oregon and Washington, mileage reimbursement is generally not required. However, it is worth noting that unreimbursed business expenses cannot reduce an employee's pay below the applicable minimum wage.

Employers who reimburse employees using the IRS standard mileage rate should make sure their reimbursement systems and policies are updated. Since the new rate is retroactively effective July 1st, employers should also review any mileage reimbursed since that date to determine whether adjustments are needed.

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