The Internal Revenue Services (IRS) has recently announced that there will be an increase in the mileage reimbursement rate come July 1, 2022. Below, we explain what exactly this rate is, the increased amount and how to apply it.

What is the Mileage Reimbursement Rate?

The mileage reimbursement rate is an optional fee amount suggested by the IRS that is paid by employers to employees who use their personal vehicles for business purposes. This is optional because taxpayers always have the option of calculating the actual costs of using their vehicle for business purposes, instead of using the standard mileage rates provided by the IRS. Taxpayers are however expected to use the standard mileage reimbursement in the very first year that the vehicle is available for use for job-related purposes, and can then opt not to use it in subsequent years. If you are using a leased vehicle, you must use the standard mileage rate method for the entire lease period (including renewals) if the standard mileage rate is chosen initially.

How Much is the Mileage Reimbursement Rate Increase


Since January 1, 2022, the standard mileage rate for the use of a car (as well as vans, pickups, or panel trucks), driven for business purposes, was 58.5 cents per mile. This was a few cents higher than the standard rate in 2021; 2.5 cents to be exact. Starting July 1, 2022, the increase of 62.5 cents will be in full effect.

Who Does This Mileage Reimbursement Rate Increase Affect?

If you’re a business that has a company vehicle or allows staff to use their vehicles for business assignments, then you have the option of using the standard mileage reimbursement rate suggested by the IRS to refund yourself or your employer. If your business uses this optional standard mileage reimbursement rate, you will need to ensure that you update your systems to reflect this increase come July 1 for accuracy.

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