New rate reflects recent changes in fuel price volatility.
Motus highlighted the Internal Revenue Service’s (IRS) mid-year adjustment to the 2026 standard mileage rate for business use, which increased to 76 cents per mile effective July 1, 2026. The rate is calculated using data from Motus, a company offering a complete solution for managing employee driving. The adjustment reflects changes in fuel prices, one of the most variable components of business-driving expenses.
Since 1981, Motus has supplied the data used to support the IRS mileage-rate calculation. Drawing from a broad pool of drivers across industries, geographies, and vehicle types, Motus analyzes national vehicle operating costs to help ensure the rate reflects real-world business-driving expenses.
Fuel prices have fluctuated significantly throughout 2026, affecting one of the most variable components of vehicle operating costs. While the IRS standard mileage rate is typically set annually, changing market conditions like this can alter the relationship between reimbursement rates and the actual cost of business driving, requiring an off-cycle rate adjustment.
“Employees who drive for work feel the effects of changing fuel prices every time they fill up their tank,” said Phong Nguyen, CEO of Motus. “A mid-year rate adjustment recognizes the changing costs that organizations and employees are facing. Keeping reimbursement rates aligned with current operating expenses helps to ensure that employees are fairly reimbursed and that business-driving costs are accurately reflected.”
The IRS standard mileage rate serves as the foundation for many reimbursement programs used by employers across the United States. For organizations with employees who drive as part of their jobs, the adjustment provides an updated benchmark for reimbursing business-driving expenses and calculating mileage-based tax deductions.
For many organizations, the updated rate may prompt a review of broader vehicle reimbursement strategies. While reimbursing at the IRS standard mileage rate remains an effective solution for many organizations, vehicle costs can vary significantly based on where employees live, how much they drive, and the type of vehicle required for their role.
“The IRS mileage rate is an important benchmark, but it is not the only way organizations can approach vehicle reimbursement,” said Nguyen. “Different workforces have different needs. The most effective employee driving programs align reimbursement to how employees actually drive while balancing cost control, employee experience, and administrative simplicity.”
As organizations evaluate reimbursement strategies based on workforce characteristics and business objectives, they can choose from several IRS-recognized approaches including a cent-per-mile (CPM) program, a Fixed and Variable Rate (FAVR) program, or a tax-advantaged accountable allowance program. Motus has helped organizations design, implement, and manage employee driving programs that reflect the realities of business driving, drawing on the expertise behind the vehicle-cost data used to support the IRS standard mileage rate.
For more information about the IRS’s mid-year mileage-rate adjustment and its implications for employers, visit the Motus blog.
