Mileage Reimbursement Calculator
Enter the miles, pick the rate, get the number you can put on an expense report.
Keep a contemporaneous log — date, destination, purpose and miles for every trip. An app or a glovebox notebook both work.
Commuting from home to your regular office does not count. Start the odometer at your first business stop.
The 22% figure is an illustration, not tax advice. What you actually save depends on your bracket and on whether you can deduct at all.
What the mileage rate actually pays for
The IRS standard mileage rate is not a fuel refund. It is a single number meant to cover everything a mile costs you: petrol, insurance, registration, tyres, servicing and depreciation. That is why 70 cents a mile looks generous next to a tank of fuel — most of it is the wear you do not see until the car is worth less than it was in January. For 2025 the business rate is $0.70 per mile, medical and qualifying moving mileage is $0.21, and driving in service of a charity is fixed by statute at $0.14 and has not moved in decades.
Worked example: an 850-mile month
A field sales rep logs 850 business miles in March. At the 2025 business rate that is 850 × $0.70 = $595.00 for the month. If March is a typical month, the annual projection is $595 × 12 = $7,140. If she is self-employed and deducting rather than being reimbursed, the tool's illustration line multiplies by a 22% marginal rate: $595 × 0.22 = 30.90 of tax saved for the month, roughly ,570 across the year. Reimbursement and deduction are different mechanisms — an employee reimbursed under an accountable plan gets cash and no deduction; a sole trader gets no cash and a deduction. The calculator shows both framings because the same mileage log feeds each.
Now change one input. If her employer pays 58 cents rather than the IRS rate, the same 850 miles pay $493.00. The 02 gap between employer rate and IRS rate used to be deductible as an unreimbursed employee expense; for tax years 2018 through 2025 that deduction is suspended for most W-2 employees. Knowing the gap is still worth it — it is the number to bring to a rate review conversation.
Where the business mile starts and stops
The boundary that generates the most audit trouble is commuting. The drive from your home to your regular workplace is personal, full stop. Working late, taking a call on the way, or carrying tools does not convert it. Once you are at work, driving between two worksites is business. Driving from your office to a client and back is business. A stop at the supermarket on the way home splits the trip: the office-to-supermarket leg follows the personal commute rule in most readings, and the safe habit is to log only the clearly business legs.
Two situations change the picture. First, if you have a qualifying home office that is your principal place of business, trips from home to clients are business miles from the driveway — this is the single most valuable point for consultants and tradespeople who genuinely work from home. Second, travel to a temporary work location outside your metropolitan area is business even when it looks like a commute. "Temporary" broadly means realistically expected to last a year or less.
An audit-proof log takes ninety seconds a week
The record the IRS wants is contemporaneous: written at or near the time of each trip, not reconstructed in April. For each trip you need the date, the destination, the business purpose and the miles. You also need total annual mileage for the vehicle, which means an odometer reading on 1 January and 31 December. That is it. A notebook in the glovebox satisfies the requirement as completely as a GPS app does.
The habits that survive contact with a real week are the boring ones. Photograph the odometer on New Year's Day. Write the purpose as a name, not a category — "Henderson site walkthrough" beats "client visit" because it is verifiable three years later. If you use a tracking app, export a backup at year end; app companies close and phones die. Reconstructing a year from calendar entries is legal but weak, and it is the most common reason a mileage claim gets reduced or thrown out entirely.
Standard rate or actual expenses
Self-employed drivers choose between the standard rate and actual expenses, and the arithmetic is worth doing once. Actual expenses means totalling fuel, insurance, repairs, registration, lease payments or depreciation for the year and multiplying by your business-use percentage.
| Situation | Usually wins | Why |
|---|---|---|
| Paid-off economy car, high miles | Standard rate | Real costs are low; 70c a mile outruns them |
| New or expensive vehicle | Actual expenses | Depreciation dominates and is large early |
| Heavy truck or van, low miles | Actual expenses | Fuel and repairs per mile are high |
| Mixed personal and business use | Standard rate | No need to track every receipt and split it |
Two rules constrain the choice. If you want the freedom to switch methods later, you must use the standard rate in the first year the car is in business service; start with actual expenses and you are locked out of the standard rate for that vehicle. A leased vehicle must keep whichever method you pick for the entire lease term. Switching from standard to actual on an owned car also requires straight-line depreciation from that point, which is a real cost worth pricing before you jump.
UK readers: the equivalent scheme
HMRC runs approved mileage allowance payments rather than an IRS rate: 45p per mile for the first 10,000 business miles in a tax year and 25p thereafter for cars and vans. Anything your employer pays above those rates is taxable; anything below can be claimed as Mileage Allowance Relief on your Self Assessment or a P87. The logic of this calculator maps directly — swap the rate into the custom field and use miles as your unit — but the two-tier threshold at 10,000 miles has to be handled by running the tiers separately.
Limits of this calculator
It multiplies miles by a rate and projects that forward. It does not know your marginal tax bracket, your state's rules, whether your employer runs an accountable plan, or whether a specific trip qualifies. The 22% line is a widely applicable federal bracket used as an illustration, not a prediction. Parking and tolls are separately reimbursable or deductible on top of the mileage rate and are not included here. For anything with money at stake — a mixed-use vehicle, a home-office claim, a year with a method change — the calculation belongs in front of a tax professional. Use this to get the number fast and to know which questions are worth asking.
Sources & further reading
Frequently asked questions
What counts as a business mile?
Driving between worksites, to a client or customer, to a temporary work location, or to the bank and post office on company errands all count. The trip from home to your regular office is commuting and never counts, even if you work late or carry tools. The exception is a qualifying home office as your principal place of business — then the first trip out of the driveway is already business.
My employer pays a different rate than the IRS one. Which do I use?
Use whatever rate your employer actually pays for the reimbursement figure — an employer can set any rate it likes. Under an accountable plan, anything up to the IRS rate is tax free to you. Anything above it is treated as wages and shows up as taxable income on your W-2.
What records do I need to keep?
A contemporaneous log: the date, the destination, the business purpose and the miles for each trip, plus your total annual mileage. Written up the same day or week is what makes it contemporaneous. Reconstructing a year of driving from calendar entries in an audit is the single most common way mileage claims fall apart.
Standard mileage rate or actual expenses — which is better?
The standard rate is simpler and usually wins for fuel-efficient, paid-off cars. Actual expenses — gas, insurance, repairs, depreciation, multiplied by your business-use percentage — usually wins for expensive or heavy vehicles. You must choose the standard rate in the first year you use a car for business if you ever want the option to switch later, and a leased car has to keep the same method for the whole lease.