What Will the IRS Standard Mileage Rate Be in 2027? 

It’s been another year, and here we are again! 2026 is (somehow) almost over, so it’s almost time for the Internal Revenue Service to announce its standard mileage rate for 2027.

At the time of writing, the standard mileage rate for the back half of 2026 is 76 cents per mile. That’s up 3.5 cents from the initial 2026 rate of 72 cents, and 6 cents higher than 2025’s standard mileage rate of 70 cents. 

While it’s a sharp spike, it was not a totally surprising or unprecedented one. The standard rate has, after all, risen year over year for the last half-decade (from 2021’s rate of 58.5 cents per mile, by the way).

Will that trend continue into 2027?

For the moment we can only make a guess, but a pretty educated guess. First, let’s review how the rate gets calculated and the trends in expenses associated with vehicle ownership.

How Does the IRS Calculate the Mileage Rate?

The IRS determines the standard mileage rate for the upcoming tax year by analyzing the average national costs of owning and operating a vehicle. 

In recent years–and this one!–the rate has gone up in no small part due to fluctuations in gas prices. However, fuel prices aren’t the only thing the IRS looks at to calculate the rate.

According to a CompanyMileage analysis, depreciation actually makes up the largest portion of vehicle ownership costs, at about 28.3%. 

After depreciation comes our good friend fuel prices, accounting for around 21% of the overall cost, followed by insurance for 16%, financing for 12.5%, maintenance and repairs for approximately 4%, and taxes and registration for nearly 8%. 

Vehicle Cost Trends 

2026 has been…eventful, to say the least. In general, and when it comes to the costs of owning and operating a vehicle in the United States.

Fuel Prices

While fuel costs aren’t the biggest factor impacting vehicle ownership costs, the rate tends to increase when pain at the pump does. Sometimes prices spike enough that the IRS makes a mid-year rate adjustment.

That happened in 2022 when high fuel costs drove the rate up from 58.5 cents in January to 62.5 cents in July through the end of the year. That happened again in 2026, when the rate rose to 76 cents per mile beginning in July through the end of this tax year.

2026’s mid-year-rate hike can be traced pretty directly to the United States’ ongoing military conflict with Iran, which began in February of this year when the U.S. and Israel attacked the country.

A month later, the national average gas price had risen a whole dollar to $3.98 a gallon. It didn’t stop there, peaking at $4.50 the week of May 11. 

Iran is on the north border of the Strait of Hormuz, a major choke point and trade route for oil and natural gas. Since the beginning of the conflict, Iran has largely blocked shipping through the Strait. As you’ve probably noticed, this has had (and continues to have) a severe impact on trade, and on the price of fuel and crude oil. 

At the time of this writing, the average U.S. of regular gas is $4.01 a gallon compared to late October of 2025,when the price was $3.05 a gallon. 

The U.S. Energy Information Administration (EIA) predicts that the price of crude oil and the retail price of fuel will drop from the highs of this year in 2027, but not to the pre-conflict prices from 2025. 

Vehicle Ownership, Maintenance and Repair

Vehicle costs have risen pretty high since the height of COVID and while that trajectory seems to have slowed, costs stay high. 

In September, Kelley Blue Book reported that the average transaction price (ATP) of a new vehicle in the United States is $50,562. That’s lower than last year’s record high of $50,614, but only by 50 bucks.   

As prices stay high, so too have the costs of repairs. The average cost of vehicle repairs in the United States has been on a relatively steady increase since around 2022, and has continued to trend upward throughout this year with no real signs of slowing. 

Insurance

Like the average cost of a new vehicle, insurance costs stayed relatively steady from 2025 to 2026, with no real indication that they’ll be dipping again anytime soon. 

What About Inflation?

Let’s take a look at 2026’s core inflation rate, which removes fuel and food prices from the equation. 

According to the Bureau of Labor Statistics, between September 2025 and September 2026 prices in the U.S. went up at a rate of 2.6%, exceeding the expected rate of 2.5%. Core inflation rose by .3% month-over-month in August and September alone. 

Will price increases finally slow in 2027? Maybe. 

Some experts predict that inflation will level out next year, while other publications, including Reuters, project that inflation will stay high due to continued geopolitical tensions.

What Do We Predict For 2026?

CompanyMileage predicts that the standard mileage rate will again go up in 2027 by 1-1.5 cents, for a rate of 77-77.5 cents per mile. Costs remain high and relatively steady, but not steady enough that we think the rate will decrease or remain unchanged. 

Instead we think it’ll go up to contend with uncertainty about inflation, trade disputes, and high oil prices, but not as drastically as it did this year. Hopefully. 

Better Mileage Management with CompanyMileage 

We can’t tell you with absolute certainty what the standard mileage rate will be for 2027. Would that we could!

But we do know this for sure: CompanyMileage will always provide the best solutions for fast, accurate, mileage reimbursements for your mobile workforce’s business-related travel in their personal vehicles. 

Our mileage reimbursement software, SureMileage, uses the start and end points of each work-related trip to automatically calculate business mileage and from there, the total amount per reimbursement. 

This automated point-to-point method reinforces accuracy, keeping calculation errors, rounding errors, duplicated trips, and ineligible travel from making their way into employee expense reports. 

CompanyMileage also significantly reduces the amount of time and effort mobile employees (and administrators) need to create, submit, and approve expense reports. With the SureMobile app, employees just need to take a few minutes at the end of each day to organize and submit their trips from their smartphones.

Once submitted, expense reports flow through an automated, easily customizable approval workflow. Upon approval, our software integrates with all major accounting and payroll systems to ensure accurate, on-time payments are issued seamlessly.

No matter what next year may bring, CompanyMileage has your back. To learn more about how we can help your company manage reimbursement and even save money in the process, contact us for a demo today!