IRS Issues Business Mileage Rate for 2024

By Sally Weldin, Sr. Human Resource Specialist
Published February 20, 2024

Effective January 1, 2024, the Internal Revenue Service (IRS) increased the optional standard mileage rate for business to 67 cents per mile. The new rate is up from 65.5 cents in 2023. This rate per mile is applicable to electric and hybrid vehicles as well as automobiles using gasoline and diesel-powered vehicles.

The standard mileage rate is based on an annual study commissioned by the IRS of both the fixed and variable costs of operating a vehicle. Employers have the option of using the standard mileage rate to reimburse employees for mileage who travel using their own personal vehicles at the direction of their employer, or setting their own rate. Mileage reimbursement is a separate expense from compensation for travel time.

Under Illinois’ Expense Reimbursement Act, which became effective January 1, 2019, employers must reimburse employees for “all necessary expenses that are incurred by the employee within the employee’s scope of employment and that are directly related to services performed for the employer.” Organizations should outline in their business expense policies when mileage would be an appropriate reimbursable expense and the method for tracking and submitting the expense. Commuting to the workplace before the start of the workday and commuting from the workplace at the end of the workday are not reimbursable expenses. The rate per mile at which the employer reimburses should be included in the policy or business expense report.

Under the Act, employees are required to submit a business expense within 30 days of incurring it, unless the employer has a written policy that provides for a longer timeframe. The employer cannot make the timeframe shorter than 30 days.

The General Services Administration (GSA) also increased their reimbursable mileage rate to 67 cents per mile as of January 1, 2024, for using a privately owned vehicle on federal travel.

Questions? HR Source members can review our FAQ on mileage reimbursement or contact us through the HR Hotline Online or at 800-448-4584.