Gas prices are on the rise, and the 2022 mileage rate soon will follow.
The IRS announced its optional standard mileage rate for business use will increase 4 cents in July, with the new rate remaining in effect for the second half of 2022. Standard rates for medical care and moving active-duty members of the Armed Forces and service also will increase by 4 cents. Rates for mileage reimbursements for individuals serving nonprofit organizations will not change.
That means the 2022 mileage rate for business travel will increase to 62.5 cents per mile and 22 cents per mile for medical care and active-duty moving.
Mid-year increases for mileage rates are rare because the IRS typically establishes its reimbursement rates for the next year in the fall of the preceding year. This is the first mid-year increase since 2011, according to a report from the Society for Human Resource Management.
The IRS bases its standard reimbursement rates on fuel costs along with other fixed and variable expenses associated with vehicle operation.
Employers are not required under the Fair Labor Standards Act to reimburse employees for mileage associated with work-related driving, however some states do require employers to reimburse their employees for work-related mileage and vehicle expenses.
Businesses can opt to pay more than the standard rate for mileage reimbursements or calculate the actual costs of vehicle use for work purposes.
The 2023 rate will be set later this year.
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~Josh Heck is Syndeo’s marketing manager. He can be reached at email@example.com or (316) 440-9940