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The Internal Revenue Service has announced the 2026 optional standard mileage reimbursement rate for employee business use of a personal vehicle, effective January 1, 2026. The rate increases 2.5 cents, from 70 to 72.5 cents/mile.
These rates apply to fully electric, hybrid, gasoline, and diesel-powered vehicles.
These standard business mileage rates stem from annual government studies of fixed and variable vehicle operating costs, including insurance, repairs, maintenance, fuel, oil, and depreciation.
Under California Labor Code section 2802, employers must reimburse employees for all actual work-related expenses necessarily incurred in the course of their job duties. While the statute does not set a specific mileage rate, many employers rely on the IRS standard mileage rate as a reasonable method of reimbursement.
Take-Away:
Employers that use the IRS standard mileage rate should reimburse employees for work-related use of personal vehicles at 72.5 cents per mile beginning January 1, 2026.
For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
See also:
Cindy Bamforth
February 11, 2026
If you are an employer facing possible litigation, or have an employee issue on which you need immediate guidance, call us to set up a consultation, or submit your message.
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