Effective January 1, 2026, the IRS standard mileage reimbursement rate for cars, vans, pickups or panel trucks increased as follows:

• 72.5 cents per mile driven for business use (up 2.5 cents from 2025);
• 20.5 cents per mile driven for medical as well as for moving purposes for qualified active-duty members of the Armed Forces (down .5 cents from 2025); and
• 14 cents per mile driven in service of charitable organizations (same as last year).

These Rates Apply to All Vehicle Types

These rates apply equally “to electric and hybrid-electric automobiles, as well as gasoline and diesel-powered vehicles.”

California Employers’ Mileage Reimbursement Obligations

California Labor Code section 2802(a) requires employers to reimburse employees “for all necessary expenditures or losses incurred…in direct consequence of the discharge of [their] duties…” This includes reimbursing employees for their work-related mileage driven in their personal vehicles, other than their normal commute to and from their first and last work locations.

When Commute Mileage Must Be Reimbursed

If the commute to and from work on any particular day will exceed the employee’s normal commute, the employer must reimburse mileage for the difference between the employee’s normal commute and the extended commute required on that day.

Is Paying the IRS Rate Required?

As a general rule, payment of the IRS standard rates noted above is deemed to be reasonable and sufficient reimbursement. If the employer chooses to pay rates lower than the standard IRS rates, the employer must be able to prove that the chosen rates fully compensated employees for their travel-related costs (including fuel, insurance, repairs and depreciation).

Why Fuel Cards Alone Are Not Enough

Remember that providing a fuel card is not considered sufficient reimbursement, as fuel is only one component of reimbursable travel expenses.

If you have any questions regarding the new IRS rates or other issues related to your company’s employment concerns, please contact our employment attorney Scott Liner at [email protected].

Have questions about mileage reimbursement or employee expense obligations?
Contact employment attorney Scott Liner at Chase Law Group.

WWW.CHASELAWMB.COM
310-545-7700

_{Please note that this article is for informational purposes only and should not be considered legal advice and does constitute an attorney-client relationship. It is recommended to consult with an attorney directly for specific guidance pertaining to your business and its practices.}