IRS Boosts Mileage Rate, Makes Other Updates for 2025

Heads up, HR: The standard mileage rate for business use is getting a slight bump in 2025, the IRS recently announced.

The Service bases the standard mileage rate for business use on an annual study of the fixed and variable costs of operating a vehicle.

Here are all the details you need to know from IRS Notice 2025-05.

Standard Mileage Rate for 2025

Beginning on January 1, 2025, the standard mileage rate will be 70 cents per mile driven for business use, up 3 cents from 2024.

When you’re relying on the business standard mileage rate, details can get blurry as one calendar year ends and the next begins. As a best practice, make sure to use the rate that was in effect when the employees were on the road – not when they submitted their expense reports.

The notice also released the portion of the business standard mileage rate treated as depreciation. That’ll be 33 cents per mile, up from 30 cents per mile.

Other Rates Remain Unchanged

In addition to the standard mileage rate, Notice 2025-05 includes other rates for 2025. The IRS announced it wouldn’t make changes for travel related to:

• receiving medical care, and
• moving (until 2026, this is for qualified active-duty service members only).

Those two rates will hold steady at 21 cents per mile.

No change to the rate for miles driven in service to charitable organizations, either. It’s still 14 cents per mile. Note: This rate is set by statute.

Max Cost of Employer-Provided Vehicles

For employer-provided vehicles, the standard automobile cost can’t exceed $61,200. That’s down from $62,000.

The maximum cost is important to employers computing vehicle allowances under a fixed and variable rate plan.