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Mileage Reimbursement Calculator

Work out a mileage claim at IRS or HMRC statutory rates, handling the 2026 mid-year US rate change and the UK 10,000-mile tier.

How to use this calculator

  1. 1Pick the applicable statutory rate, or enter your own.
  2. 2Enter the business miles driven. For a UK car claim the 10,000-mile tier is applied automatically.
  3. 3If your US claim spans 1 July 2026, switch on the split and enter each half separately.
  4. 4Add what your employer actually pays to see any shortfall you may be able to claim relief on.

How the calculation works

claim = miles × rate UK car: 45p × min(miles, 10,000) + 25p × max(0, miles − 10,000) US 2026: 72.5¢ before 1 July, 76¢ after
rate
The statutory rate per mile, set by the IRS or HMRC to cover the full cost of running a vehicle
10,000 miles
HMRC's cumulative annual threshold, after which the car rate drops from 45p to 25p
effective rate
Total claim divided by total miles — below the headline rate once tiering or a mid-year change applies

The statutory rate is not a fuel rate. It is calculated from an annual study of the full cost of operating a vehicle, including depreciation, insurance, maintenance and tyres, which is why it far exceeds the cost of petrol for the same distance.

The UK threshold is cumulative across the tax year rather than per journey. Someone driving 15,000 business miles claims 45p on the first 10,000 and 25p on the remaining 5,000, giving a blended rate of about 38p.

The 2026 US rates changed mid-year, on 1 July. That is unusual — it last happened in 2022 — and it means an annual claim spanning the date needs both rates applied to the relevant periods.

The US charitable rate is fixed in statute rather than set by the IRS, which is why it has stayed at 14¢ since 1998 while the business rate has more than doubled.

Worked example

5,000 US business miles in the second half of 2026

  1. 1.The IRS business rate from 1 July 2026 is 76 cents per mile.
  2. 2.Claim: 5,000 × $0.76 = $3,800.
  3. 3.That rate covers depreciation, insurance and maintenance as well as fuel.
  4. 4.For comparison, 5,000 miles at 30 mpg with $3.50 petrol costs about $583 in fuel alone.
  5. 5.The gap is the point — the statutory rate reimburses the cost of running the car, not just filling it.

Result: $3,800

15,000 UK miles, crossing the tier

  1. 1.HMRC pays 45p for the first 10,000 business miles: 10,000 × £0.45 = £4,500.
  2. 2.Miles above 10,000 drop to 25p: 5,000 × £0.25 = £1,250.
  3. 3.Total approved amount: £5,750, an effective rate of about 38.3p per mile.
  4. 4.Applying 45p to all 15,000 miles would give £6,750 — an overstatement of £1,000.
  5. 5.The employer here pays a flat 25p, totalling £3,750, so £2,000 of the approved amount is unpaid.
  6. 6.That £2,000 shortfall can be claimed as Mileage Allowance Relief.

Result: £5,750 approved, £2,000 claimable

Why the rate is so much more than the fuel

A statutory mileage rate looks generous next to the cost of petrol, and the gap is deliberate. Both the IRS and HMRC set their rates from studies of the whole cost of running a vehicle: depreciation, insurance, maintenance, tyres, registration and fuel.

Depreciation is usually the largest single component and the one drivers overlook, because it does not appear as a payment. A car driven hard for business loses value considerably faster than one that is not, and the rate is meant to compensate for that loss as much as for the fuel burned.

This is why claiming the standard rate almost always beats claiming actual fuel costs, and why the alternative — the actual expense method in the US — requires tracking every vehicle cost with receipts. Most people are better off with the standard rate simply because it captures costs they would struggle to document.

The two traps: mid-year changes and cumulative tiers

Rates normally change on 1 January and hold for the year, which is why most calculators assume a single annual figure. In 2026 that assumption is wrong: the IRS raised the business rate from 72.5¢ to 76¢ on 1 July, and the medical rate from 20.5¢ to 23.5¢, in response to fuel costs. Anyone claiming for the full year must apply both.

The UK trap is different in kind. HMRC's 45p rate applies only to the first 10,000 business miles in the tax year, dropping to 25p thereafter — and the threshold is cumulative across the whole year, not per journey, per client or per vehicle. A driver covering 20,000 miles who applies 45p throughout overstates the claim by £2,500.

Both traps share a cause: the rate is a property of when and how much you drove, not of the individual journey. Logging miles per trip without also tracking the running annual total makes either mistake easy.

When your employer pays less than the statutory rate

Employers are not obliged to reimburse at the statutory rate, and many pay less. In the UK the difference has a formal remedy: Mileage Allowance Relief, claimed through self-assessment or a P87 form, gives tax relief on the gap between what you were paid and the approved amount.

Someone driving 10,000 miles reimbursed at 25p receives £2,500 against an approved £4,500, leaving £2,000 unrelieved. Claiming brings tax relief at their marginal rate on that £2,000 — worth £400 to a basic-rate taxpayer and £800 at higher rate. It is frequently unclaimed simply because people do not know it exists.

Payment above the approved rate works the other way: the excess is treated as taxable earnings rather than a tax-free reimbursement, and should be reported. The statutory rate is a ceiling for tax-free treatment as well as a benchmark for relief.

What this assumes, and where it stops

Assumptions

  • Rates are those published by the IRS and HMRC as at 14 August 2026.
  • The UK 10,000-mile threshold is cumulative across the tax year for all business miles in cars and vans.
  • US rates for 2026 change on 1 July, and the split option applies each rate to its own period.
  • Miles entered are genuine business miles, excluding ordinary commuting.

Limitations

  • Rates change, sometimes mid-year. The figures here were checked on the date stated and should be confirmed against the tax authority before filing.
  • Commuting between home and a permanent workplace is not deductible in either country and should be excluded from the miles entered.
  • Covers the standard mileage method only. The US actual expense method, which itemises every vehicle cost, may produce a larger deduction for expensive or heavily depreciating vehicles.
  • Does not handle passenger supplements, company car fuel benefit, or the separate advisory fuel rates HMRC publishes for company cars.
  • Not tax advice. Eligibility depends on your circumstances and the rules of your jurisdiction.

Common questions

What is the IRS mileage rate for 2026?

72.5 cents per mile for business use from 1 January 2026, rising to 76 cents from 1 July. The medical and moving rate went from 20.5 to 23.5 cents on the same date. The charitable rate stayed at 14 cents, because that figure is fixed by statute rather than set by the IRS.

How does the UK 10,000-mile mileage threshold work?

HMRC approves 45p per mile for the first 10,000 business miles in the tax year and 25p for every mile after that. The threshold is cumulative across the whole year, not per journey or per vehicle, so 15,000 miles gives £5,750 rather than the £6,750 that a flat 45p would suggest.

Why is the mileage rate higher than what I spend on fuel?

Because it is not a fuel rate. Tax authorities set it from studies of the full cost of running a vehicle — depreciation, insurance, maintenance, tyres and registration as well as fuel. Depreciation is usually the largest component, and it is the cost drivers most often forget because no payment is made.

Can I claim if my employer pays less than the statutory rate?

In the UK, yes — the gap between what you were paid and the approved amount qualifies for Mileage Allowance Relief, claimed through self-assessment or a P87. Someone paid 25p against the approved 45p over 10,000 miles has £2,000 of unrelieved expense. Similar relief exists in the US, though the rules changed substantially for employees in 2018.

Sources

Formula and content last reviewed on .

Results are estimates for information only, not professional advice.

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