Share on facebook
Share on twitter
Share on linkedin
Share on pinterest

2022 IRS Standard Mileage Rate: What To Expect

irs mileage rate 2022 driver mobile employee

While the 2022 IRS standard business mileage rate hasn’t yet been announced, it’s certainly worth discussing what the rate might be, how it might affect you or your business, and where the IRS standard mileage rate comes from. Using the last few years as precedent, the IRS will likely announce next year’s standard mileage rate in mid-December 2021.

What Does the IRS Standard Mileage Rate Refer To?

The IRS standard mileage rate is a recommended reimbursement rate for companies to their employees who use their personal vehicles to conduct business on behalf of their employer. For example, if a business chooses to use 2021’s mileage rate, they will reimburse their employee 56 cents per mile driven in their personal vehicle for business use.

This figure changes yearly and is based on the fixed and variable costs of owning and operating a motor vehicle. Things like gas, oil changes, vehicle depreciation, and other factors go into the IRS determining the number.

Related: Employee Mileage Reimbursement Guide (2021)

It is important to note that this is an optional rate for companies to offer to their employees. There isn’t a federal requirement or mandate to do so, although some states have their own requirements. Generally, companies that offer mileage reimbursement plans tend to hire and retain higher-quality candidates.

How Will the 2022 Business Mileage Rate Change? 

The standard business mileage rate has gone down steadily since 2019, from 58 to 57.5 in 2020, to 56 in 2021. This is, once again, due to their determination of the fixed and variable costs of owning and operating a motor vehicle.

In order to determine how the business mileage rate will change in 2022, we need to examine trends and the changes to the costs of owning and operating a vehicle through 2021.

How Have Vehicle Costs Changed Throughout 2021?

According to the United States Energy Information Administration, national average gas prices have risen from $2.25 in October 2020 to $3.38 in October 2021. In addition, car insurance costs have also increased in the same time frame.

A report from AAA found that the cost of owning and operating a motor vehicle has been steadily increasing over the past few years, and there’s no reason to assume this trend will diminish in 2022. Maintenance costs have also been increasing over the past few years. 

These particular increases in the cost of owning and operating a car may make one think that the standard business mileage rate will increase, but there are other factors to consider. For instance, while inflation continues to rise in the United States, the rate of inflation has actually been decreasing since 2018, which may be a big contributor to why the standard business mileage rate has decreased in the same time frame.

What Will the 2022 Standard Business Mileage Rate Be?

With that said, given the general increases in the costs of owning and operating a motor vehicle, we at TripLog would assume that businesses should be prepared for a likely increase in the standard business mileage rate. We predict the number won’t go up more than a few cents, given the majority of precedent over the last 10 years, outside of the 3.5 cent increase from 2018 to 2019, though this had been partially due to the effects of the Trump administration’s Tax Cuts and Jobs Act, and a 3.5 cent decrease from 2015 to 2016.

Related: TripLog’s Mileage Reimbursement Guide

Companies should expect the rate to increase from the current rate of 56 cents per mile to around 57 or 58 cents per mile. Even for smaller companies with only a dozen or so mobile employees driving a few thousand miles each year, this can mean an increase of total reimbursement costs by several hundred or even a few thousand dollars. Larger companies with 100+ drivers may pay significantly more.

Be Prepared for an Increase in the Standard Mileage Rate

Using a modern company mileage tracking solution like TripLog is the best way for companies to ensure they’re providing accurate reimbursement to their mobile team members and employees.

To learn more about what TripLog can do for you and your company, please schedule a complimentary demo, or visit our pricing page to get started on your mileage reimbursement journey in minutes. 

Like what you read?

Show that you found the article interesting by liking and sharing.

Get TripLog for your team

triplog logo

Mileage, Expense, & Time Tracking and Reimbursement

reviews

(4.8 rating score)

© 2011 – 2021 Copyright TripLog, Inc. All Rights Reserved.

Mileage Reimbursement Savings Calculator

Using outdated manual mileage logs can cost businesses thousands of dollars per year in lost time and incorrect reimbursements. See how much TripLog can help you save!

Number of drivers

Average miles daily per person​

Number of trips daily

Cents-per-mile

Annual mileage reimbursement costs based on the numbers you provided.

Annual Mileage Reimbursement

50 mi/day x 100 drivers x $0.54 (5 days x 50 wks)

$675,000

This is the inline help tip! You can explain to your users what this section of your web app is about.

According to research, on average employees inflate the mileage by 25% when self reported.

Estimated Reimbursement Savings

25% x Annual Mileage Reimbursement

$168,750

People on average spend 2 minutes on manually recording trips.

Manual Entry Hours

2 mins x 10 trips/day x 100 drivers (5 days x 50 wks)

8,334 hr

Taking national average $25 hourly rate.

Estimated Labor Savings

Avg. $25/hr x Manual Entry Hours

$208,334

Your Company

could save

(Labor Savings + Reimbursement Savings) / Number of Drivers

$4,167

per driver