2022 Business Mileage Rates
Effective Jan. 1, 2022, the optional standard mileage rate used in deducting the costs of operating an automobile for business purposes will be 58.5 cents per mile, the IRS announced in Notice 2022-03 on Dec. 17.
Employers often use the standard mileage rate—also called the safe harbor rate—to pay tax-free reimbursements to employees who use their own vehicles for business.
For 2022, standard mileage rates for the use of cars, vans, pickups or panel trucks will be:
- 58.5 cents per mile driven for business use, up 2.5 cents from 2021. This ties the highest safe harbor rate the IRS has ever published, which was a midyear increase in July 2008.
- 18 cents per mile driven for medical care and for moving purposes for active-duty members of the Armed Forces, up 2 cents from the rate for 2021.
- 14 cents per mile driven in service of charitable organizations, which remains unchanged.
For cars employees use for business, the portion of the standard mileage rate treated as depreciation will be 26 cents per mile for 2022, unchanged from 2021.
While the standard mileage rates for business, medical and moving purposes are based on annual changes in the costs of operating an automobile, the charitable rate is set by statute.
There were quite a few compounding trends from 2021 that affected driving costs, including:
- Fuel prices rocketed up in 2021, representing a 32 percent year-over-year increase in the national average between October 2020 and October 2021 and the highest levels since 2014.
- Insurance resumed its steady pace of annual increases that was disrupted in 2020, representing a 24.2 percent increase in auto insurance premiums since 2011, with accident frequency in 2021 heading toward 2019 levels.
- Disruptions in the supply chain and constraints such as the chip shortage led to depreciation rates remaining low—70 percent lower than pre-pandemic levels—with residual values for vehicles likely remaining high.