A superintendent who drives a personal pickup between three jobsites turns in a mileage log at the end of the month, and payroll pays it at a set amount per mile. Many contractors take that amount from the IRS business standard mileage rate. Estimators often use the same rate to price vehicle travel on a job far from the yard.
The IRS changed the rate partway through 2026. The business rate was 72.5 cents a mile from January 1 through June 30 and is 76 cents from July 1 through December 31, according to the IRS standard mileage rates page. The IRS tied the July increase to fuel prices, and this post prices a month of crew truck miles at both rates.
What the rate covers
The standard rate replaces the itemized costs of running a vehicle. IRS Topic 510 lists those costs under the actual expense method as gas, oil, repairs, tires, insurance, registration fees, licenses, and depreciation or lease payments. Parking fees and tolls for business trips are deductible separately under either method.
Notice 2026-10 says an independent contractor studies the fixed and variable costs of operating an automobile for the IRS each year, and the rate comes from that study. The notice also says 35 cents of each 2026 business mile counts as depreciation. Subtract that from the July rate and 41 cents a mile is left for fuel, maintenance, insurance and the rest, up from 37.5 cents in the first half.
Topic 510 limits who can use the rate. The taxpayer must own or lease the vehicle and must not operate five or more cars at the same time, as in a fleet operation. An owned vehicle has to go on the standard rate in its first year of business use. A vehicle that has taken MACRS depreciation, a Section 179 deduction or the special depreciation allowance can’t use it.
For reimbursements, Announcement 2026-11 says the rate also sets how much of an employee’s mileage allowance counts as substantiated. The 76-cent rate applies to allowances paid on or after July 1 for miles driven on or after July 1. Earlier miles stay at 72.5 cents. The per diem post covers the accountable plan rules that decide whether an allowance is treated as wages.
What changed in July
The IRS set the 2026 rate in a news release on December 29, 2025, at 2.5 cents above 2025. It raised the rate again in Announcement 2026-11, which gives a single reason: “This modification results from recent increases in the price of fuel.”
Diesel reached $6.29 a gallon in September, its highest in 25 months
U.S. average retail price, dollars per gallon, monthly average of EIA's weekly survey, September 2024 to September 2026
EIA’s average diesel price was $3.615 a gallon in December 2025 and $5.024 in June 2026, a 39% increase over the period when the 72.5-cent rate was in force. Regular gasoline rose 40% over the same months, from $2.894 to $4.050. The mileage rate rose 3.5 cents, or 4.8%, in July.
Fuel kept rising after the change. Diesel averaged $6.291 in September, 68% above September 2025, and regular gasoline averaged $4.355, up 38%. EIA’s weekly survey for October 19 put diesel at $6.276, $2.656 above the same week a year earlier.
| Period | Business rate (cents per mile) | IRS source |
|---|---|---|
| 2022 (Jan. 1 to June 30) | 58.5 | IR-2021-251 |
| 2022 (July 1 to Dec. 31) | 62.5 | IR-2022-124 |
| 2023 | 65.5 | IR-2022-234 |
| 2024 | 67.0 | IR-2023-239 |
| 2025 | 70.0 | IR-2024-312 |
| 2026 (Jan. 1 to June 30) | 72.5 | IR-2025-128 |
| 2026 (July 1 to Dec. 31) | 76.0 | Announcement 2026-11 |
The IRS made a similar mid-year change in 2022, raising the rate from 58.5 to 62.5 cents for July through December.
A worked example
The figures below are an example. A three-quarter-ton diesel crew truck gets 15 miles per gallon and runs 2,000 miles a month, about one round trip a workday between the yard and a job 45 miles away. The table prices those miles at both 2026 IRS rates and prices the truck’s fuel alone at EIA’s September averages for 2025 and 2026.
| Cost line | Per mile ($) | Cost per month ($) |
|---|---|---|
| IRS business rate Jan. to June 2026 | 0.73 | $1,450 |
| IRS business rate July to Dec. 2026 | 0.76 | $1,520 |
| Diesel at 15 mpg, September 2025 ($3.748 a gallon) | 0.25 | $500 |
| Diesel at 15 mpg, September 2026 ($6.291 a gallon) | 0.42 | $839 |
At the July rate, 2,000 miles reimburse $1,520 a month. Diesel for the same miles costs $839 at September 2026 prices, up $339 from $500 a year earlier. Over that year the IRS rate went from 70 cents to 76 cents, which adds $120 a month for the same miles.
Fuel’s share of the rate changed with it. In September 2025, fuel for this truck took 25 cents of a 70-cent rate, or 36%, and left 45 cents a mile for everything else. In September 2026 it takes 41.9 cents of 76, or 55%, and leaves 34 cents. A truck that gets 10 miles per gallon burns 62.9 cents of diesel a mile at the September price, 83% of the rate.
Because of the five-vehicle limit in Topic 510, a contractor with a truck fleet prices those trucks from its own costs, as in the equipment hourly rate post. The fuel line in that rate should use the current diesel price, and the construction input prices post shows how far fuel has moved in the producer price data. For a long job, the escalation clause post sets out how to tie a price adjustment to a published index.
How to start on your jobs
Pull your mileage reimbursements for July, August and September and confirm that payroll paid miles driven after July 1 at 76 cents. Miles from June paid in July stay at 72.5 cents under Announcement 2026-11.
Then take one company truck. Divide last month’s fuel card spending by the miles on its odometer or telematics log to get fuel cost per mile, and set it next to the 76-cent rate. On the next bid with long drives, price vehicle miles from that figure plus your maintenance, insurance and ownership costs, and update the fuel portion from the regional diesel prices in EIA’s weekly survey.