2026 mileage rates: IRS 76¢ a mile from July 1, CRA 73¢ a km

The 2026 rates at a glance

IRS standard mileage rates

The IRS set the 2026 rates in Notice 2026-10, announced December 29, 2025. They apply to miles driven from January 1, 2026. In July the IRS raised the business and medical/moving rates mid-year because of fuel prices (Announcement 2026-11): 76 cents and 23.5 cents a mile for driving on or after July 1. It is not retroactive, so a 2026 log needs two calculations: miles before July 1 at 72.5 cents and miles after at 76 cents. Try our mileage calculator.

• Self-employed and business owners can deduct business miles at the standard rate instead of actual car costs. For a car you own, you must use the standard rate in the first year the car is used for business to keep the option later; for a leased car, use it for the whole lease. Parking and tolls for business trips are deductible on top.
• Employers who reimburse employees at or below the standard rate, under an accountable plan with a mileage log, don't treat the reimbursement as wages. Anything over the rate, or paid without records, is taxable pay.
• Employees generally can't deduct unreimbursed mileage on their federal return, so reimbursement is what matters to them.
• Commuting between home and a regular workplace is personal, not business, mileage.

CRA per-kilometre allowance rates

Canada works differently. The Department of Finance sets the rates an employer can deduct for allowances paid to employees; they don't set a deduction for the self-employed.

• Employees: a reasonable allowance based only on business kilometres driven is not taxable. Paying the prescribed rates (73 cents for the first 5,000 km and 67 cents after, more in the territories) is the usual benchmark. A flat monthly allowance not tied to kilometres is generally a taxable benefit and goes on the T4.
• Self-employed: deduct the business share of actual costs: fuel, insurance, maintenance, licence and registration, interest and capital cost allowance, using business kilometres divided by total kilometres. For cars bought in 2026 the capital cost ceiling is $39,000 before tax ($61,000 for zero-emission vehicles); leases are capped at $1,100 a month and interest at $350 a month.
• Employer-provided cars: personal driving creates a taxable operating cost benefit of 34 cents a km.

Quebec uses the same 2026 figures for provincial purposes.

What a mileage log must show

Both tax agencies want records made at or near the time of the trip, not rebuilt in April. For each business trip, record:

• The date
• Where you went (start and destination)
• The business purpose: the customer, job or errand
• The distance, in miles or kilometres

Also note the odometer reading at the start and end of the year, so total and business driving can be compared. The IRS also asks for the vehicle's total miles for the year.

The CRA offers a shortcut once you have a full 12-month logbook as a base year: in later years you can keep the log for one representative three-month period, as long as business use stays within 10% of the base year. If it moves more than that, the base year no longer applies and you go back to a full log.

A log that only shows round numbers, or the same trip every day, is the first thing an auditor questions. Record trips as they happen.

Mileage in your books

1. Set your rate each January. Rates change every year; check the IRS or Department of Finance announcement and update your system.
2. Reimburse separately from wages. A non-taxable mileage reimbursement belongs on the paycheck as a reimbursement, not as extra pay, or it ends up in taxable wages on the W-2 or T4.
3. Bill job mileage. If your contract allows it, put the miles on the customer's invoice instead of absorbing the cost.
4. Keep the log with your records: four years for most US tax records, six years in Canada.

For the rest of 2026's US payroll numbers, see what changed in US payroll for 2026.