In case you missed it, the IRS has adjusted the business mileage rate upward for 2025. This is despite a reduction in the price of oil from one year ago. The optional standard mileage rate used by employees driving automobiles for business usage has increased, effective January 1, 2025. The mileage rates for vehicles used for other purposes remain unchanged from 2024.
The IRS announced the mileage rates for 2025 just before the holidays. The new business use rate is 70 cents per mile, a 3-cent increase from 2024. So be sure you have updated your business miles calculation to the new, higher rate.
The rate for miles driven for medical purposes and moving for qualified active-duty military remains 21 cents per mile. The rate for driving in service to charitable organizations remains 14 cents per mile, as it has been for over a decade.
These rates apply to electric and hybrid automobiles as well as gasoline- and diesel-powered vehicles.
Reimbursement Rate Not a Requirement
Of course, businesses may reimburse employees at whatever rate they wish, whether less, more or the same as the IRS-set rate. However, any reimbursement greater than the IRS rate of 70 cents per mile must be reported as income to the employee. Company policy makers might also keep in mind that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses.
Most organizations polled reimburse at the IRS rate, while a few reimburse under the IRS cap.
Here’s a table with the mileage rates for the past several years:
| Rates in cents per mile | |||
| Period | Business | Charity | Medical/ Military Moves |
| 2025 | 70 | 14 | 21 |
| 2024 | 67 | 14 | 21 |
| 2023 | 65.5 | 14 | 22 |
| 7/1/2022-12/31/2022 | 62.5 | 14 | 22 |
| 1/1/2022-6/30/2022 | 58.5 | 14 | 18 |
| 2021 | 56 | 14 | 16 |
| 2020 | 57.5 | 14 | 17 |
| 2019 | 58 | 14 | 20 |
| 2018 | 54.5 | 14 | 18 |
| 2017 | 53.5 | 14 | 17 |
| 2016 | 54 | 14 | 19 |
| 2015 | 57.5 | 14 | 23 |
| 2014 | 56 | 14 | 23.5 |
| 2013 | 56.5 | 14 | 24 |
| 2012 | 55.5 | 14 | 23 |
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2025 Notice
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