Effective July 1, 2026, the IRS raised the standard mileage reimbursement rate to 76 cents per mile, up from 72.5 cents in the first half of the year. For household employers, this is the rate most commonly used to reimburse nannies, housekeepers, personal assistants, and other staff who use their own vehicle for work related driving. If your household employs domestic staff, here is what the change means and how to put it into practice.
What Changed
The IRS adjusts the standard mileage rate periodically to reflect the cost of operating a vehicle, and this year it made a mid year revision in response to rising fuel prices. The rate for business use, the one relevant to household employees, moved from 72.5 cents per mile to 76 cents per mile as of July 1, 2026.
Why It Matters for Your Household
If a nanny, housekeeper, or other employee regularly uses their personal vehicle for job related driving, such as school pickups, grocery runs, or household errands, they should be reimbursed at the current IRS rate. This is considered a nontaxable reimbursement when calculated correctly, and it protects both parties. For employers, using the correct rate keeps payroll compliant. For staff, it ensures they are fairly compensated for the true cost of using their own car for work.
How to Apply the New Rate
A few practical steps to keep reimbursements accurate for the rest of 2026:
Split your records at July 1. Mileage driven January through June should still be reimbursed at 72.5 cents per mile. Mileage from July 1 onward should use the new 76 cent rate. Update your payroll or expense tracking system so future reimbursements reflect the current rate. Keep a simple mileage log with dates, destinations, and purpose, this supports the reimbursement as nontaxable and makes record-keeping easy at tax time. Remember that commuting mileage, the drive between home and the household, is not reimbursable. Only mileage driven for work related errands and tasks qualifies.
A Detail Worth Getting Right
Small details like mileage reimbursement rates are easy to overlook, but they matter. Staying current protects your household from compliance issues and shows your staff that you value their time and expenses. It is exactly the kind of detail we help our clients stay ahead of, from payroll questions to day to day household management.
Have questions about reimbursement best practices? Reach out to The Washburn Agency, we are happy to help.
