Mileage Reimbursement Calculator: 2025 IRS Mileage Rates

Frequently Asked Questions

• What is mileage reimbursement?
  Mileage reimbursement is the process by which employers compensate employees for using their personal or business vehicles for work-related purposes. According to the IRS, “the mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile.” This might include fuel, wear and tear, maintenance, and insurance related to the business miles driven. The amount reimbursed is usually based on a set per-mile rate, such as the IRS standard mileage rate, though companies can adjust this rate based on their policies.
• How do you calculate mileage reimbursements?
  To calculate mileage reimbursements manually, multiply the number of business miles driven by the reimbursement rate, which is typically based on the IRS standard mileage rate or a company’s custom rate. For example, if the IRS rate is 70 cents per mile and an employee drives 100 miles for business, the reimbursement would be 100 miles x $0.70, which equals $70. Or, use the free calculator at the top of this page!
• Why should businesses care about mileage reimbursement?

  Mileage reimbursement helps ensure that employees are fairly compensated for using personal vehicles for work. It also helps businesses maintain compliance with tax regulations and accurately track travel-related expenses.

• What is the difference between business and personal mileage?
  Business mileage refers to miles driven for work purposes, such as client meetings or job site visits. Personal mileage typically includes any non-work-related travel, such as commuting to and from home, though some companies allow reimbursements for commutes.
• Do mileage reimbursements include gas/fuel?
  Yes, mileage reimbursement typically covers the cost of fuel as part of the overall reimbursement rate, which is designed to account for all expenses related to using a personal vehicle for business purposes. The exact coverage and reimbursement rates can vary depending on the country and the specific policies set by the employer.
• Is mileage reimbursement taxable?
  Mileage reimbursement is generally not taxable if it is at or below the IRS standard mileage rate. Reimbursements above the IRS rate may be considered taxable income. It’s important to consult with a tax professional to understand specific circumstances.
• Can employers offer more than the IRS rate?
  Yes, employers can offer a higher rate than the IRS standard. However, the amount exceeding the IRS rate may be taxable for the employee.
• What is the average mileage reimbursement rate?
  The average mileage reimbursement rate is set by the IRS each year. For 2025, the rate is 70 cents per mile for business travel. Rates may vary based on location and the specifics of your company’s reimbursement policy.
• How do employees track mileage for reimbursement?
  In the past, employees had to track mileage using methods such as mileage logs or spreadsheets. While these traditional methods can work, they often lead to errors, time-consuming manual entries, and challenges with compliance. Automated tools like Navan offer a more efficient solution. Employees can log their trips automatically, helping to ensure accuracy and compliance while saving valuable time. It’s easy for employees to file a mileage claim. Simply input the start and end points of a journey. Navan then confirms the distance between locations and auto-populates the appropriate reclaim amount. Plus, businesses can streamline the approval and reimbursement process, reducing the administrative burden and enhancing overall efficiency.
• Does Navan support mileage reimbursement for European and international regulations?
  Yes. Navan’s mileage reimbursement tool is designed to support businesses globally, including those with more complex regulations in Europe and other regions. While the IRS standard mileage rate is commonly used in the U.S., our platform allows businesses to tailor reimbursement policies based on local tax laws and requirements.
• Does Navan support custom mileage reimbursement policies?

  Yes. Navan offers standard and custom reimbursement programs, enabling businesses to tailor policies to their needs. Advanced mileage options allow companies to implement nuanced settings for more precise distance calculations and regional rate alignment. Employees can easily log mileage and automatically calculate reimbursements — at no additional cost.

  Additional mileage settings include distance driven, vehicle type, engine size, and more. Learn more about mileage reimbursement on Navan.