Mileage Allowance Calculator HMRC and International Rates

United Kingdom Mileage Allowance Calculator HMRC Rules

His Majesty's Revenue and Customs (HMRC) sets Approved Mileage Allowance Payments (AMAP) to define the maximum tax-free rate an employer can pay an employee for business travel in a personal vehicle. Effective 6 April 2026 for the 2026-27 UK tax year, the AMAP rate for cars and vans is 55 pence per mile for the first 10,000 business miles in the tax year, dropping to 25 pence per mile for every business mile after that threshold. This 55p rate marks an increase from the prior 45p level, which remained unchanged since 2011.

Motorcycles and bicycles operate under separate flat schedules with no initial mileage threshold. The statutory rate for business travel on a motorcycle is 24 pence per mile across all miles driven in the tax year. Bicycles qualify for a flat rate of 20 pence per mile. Employers who reimburse staff at or below these statutory amounts make payments free of income tax and National Insurance contributions, as detailed on GOV.UK travel mileage and fuel rates.

The approved rates bundle all operational vehicle costs into a single pence-per-mile figure. This statutory payment covers fuel, comprehensive insurance, annual servicing, tyre replacements, road tax, and general mechanical wear. Employers cannot add separate payments on top of the approved allowance for fuel or general maintenance without creating a taxable benefit for the employee.

Mileage Allowance Relief Calculator Rules for British Workers

Mileage Allowance Relief (MAR) provides statutory income tax relief to British employees whose employers pay less than the approved AMAP allowance. If your employer reimburses you at a rate below 55 pence per mile, or pays no travel reimbursement at all, you can deduct the total financial shortfall from your taxable employment income. You calculate this deduction by multiplying your annual business miles by the applicable statutory rate and subtracting any reimbursement your employer provided.

Consider an employee who drives 8,000 business miles in a personal car during the tax year and receives an employer reimbursement of 30 pence per mile. Under statutory rules, the approved tax-free allowance equals 8,000 miles multiplied by 55 pence, which totals £4,400. The employer actually paid 8,000 miles multiplied by 30 pence, which totals £2,400. The employee calculates an allowable relief amount of £2,000 on the shortfall.

Workers claim this tax relief either through an annual Self Assessment tax return or by using the dedicated digital portal on GOV.UK tax relief for vehicles you use for work. Value Added Tax (VAT) registered employers who reimburse mileage can also reclaim VAT on the fuel portion of the allowance. To do this, the employer must refer to HMRC's published advisory fuel rates rather than applying the standard VAT percentage to the overall AMAP payment.

Canada Automobile Allowance Rates for Provincial and Territorial Driving

The Canada Revenue Agency (CRA) establishes reasonable per-kilometre allowances that employers can pay tax-free to employees who operate personal vehicles for employment duties. Effective 1 January 2026, the tax-exempt automobile allowance rate for the Canadian provinces is 73 cents per kilometre for the first 5,000 business kilometres driven within the calendar year. Every business kilometre driven beyond that 5,000-kilometre threshold receives a statutory ceiling of 67 cents per kilometre, representing a 1-cent increase across both tiers over 2025 schedules.

Driving conditions in northern jurisdictions require higher expense allocations. In Yukon, the Northwest Territories, and Nunavut, the CRA sets the allowance 4 cents higher per kilometre: 77 cents per kilometre for the first 5,000 business kilometres, and 71 cents per kilometre thereafter. The Department of Finance Canada publishes these deduction limits annually to account for capital costs, insurance, and fuel inflation.

These published figures serve as the strict ceiling for non-taxable employer payments. If an enterprise chooses to pay a worker an allowance higher than 73 cents per kilometre in a province, the entire excess amount becomes a taxable employment benefit subject to payroll withholdings. Conversely, paying an unreasonably low flat allowance without tracking kilometres can result in the CRA treating the entire payment as taxable compensation.

Ireland Civil Service Motor Travel Rates and Distance Bands

Ireland manages business travel reimbursements through the Civil Service motor travel rates, which Revenue permits private-sector businesses to adopt as tax-free reimbursement benchmarks. Rates operate across four distinct distance bands that vary based on engine displacement. For vehicles with an engine displacement of 1501cc and over, Band 1 covers up to 1,500 kilometres at 51.82 cents per kilometre. Band 2 covers travel between 1,501 and 5,500 kilometres at 90.63 cents per kilometre.

This schedule features an unusual structure where Band 2 reimburses at a significantly higher rate per kilometre than Band 1. Most international rate schedules start with their highest rate to cover fixed vehicle overheads and decrease as distance accumulates. Ireland concentrates overhead compensation in the second distance tier before lowering rates substantially in the higher brackets. Band 3 covers 5,501 to 25,000 kilometres at 39.22 cents per kilometre, while Band 4 reimburses any travel at 25,001 kilometres and over at 25.87 cents per kilometre.

Electric vehicles are classified under the statutory 1201cc to 1500cc engine displacement category regardless of their kilowatt output. Private businesses are not legally required to adopt Civil Service schedules, but Revenue.ie Civil Service rates guidance confirms that any employer reimbursement at or below these published figures qualifies as a tax-free expense repayment.

New Zealand Inland Revenue Kilometre Rates and Fuel Tiers

Inland Revenue Department (IRD) kilometre rates in New Zealand apply a dual-tier calculation based on the vehicle's specific powertrain. For the 2025-26 income year, Tier 1 rates cover both fixed capital costs and variable running expenses for the first 14,000 kilometres of total vehicle travel. Under Tier 1, the rate is $1.20 per kilometre for petrol vehicles, $1.30 for diesel, $0.90 for petrol hybrids, and $1.22 for battery electric vehicles.

Tier 2 covers only variable operating expenses once a vehicle exceeds the 14,000-kilometre mark in an income year. The Tier 2 rate drops to $0.37 per kilometre for petrol, $0.38 for diesel, $0.24 for petrol hybrids, and $0.23 for electric vehicles. As outlined in Inland Revenue Operational Statement OS 19.04, this 14,000-kilometre threshold measures combined business and private mileage across the vehicle's full annual logbook, not business travel alone.

Adopting IRD kilometre rates remains an optional compliance method rather than a statutory obligation. Sole traders, contractors, and companies can bypass the standard rates and choose to deduct actual vehicle expenditure by preserving itemised receipts and logbooks. Employers may also establish internal reimbursement agreements that deviate from IRD figures, though payments exceeding reasonable business costs may create fringe benefit tax implications.

Differences Between International Systems and United States Mileage Rates

United States federal mileage deductions operate under a completely distinct framework run by the Internal Revenue Service (IRS). For calendar year 2026, the IRS standard mileage rates stand at 72.5 cents per mile from January 1 to June 30, and 76 cents per mile from July 1 to December 31. The American system measures travel in miles rather than kilometres, does not alter rates based on vehicle engine size, and changes its mid-year allowance when energy costs shift.

American workers who visit international travel calculators frequently mistake statutory figures from HMRC or CRA for their own tax deduction rates. Drivers operating in the United States must track deductible travel using domestic rules, which you can explore through our mileage deduction calculator and our guide on the IRS mileage rate for 2026. Employees seeking reimbursement guidelines across specific states should consult our breakdown of state mileage reimbursement laws.

To ensure your business travel calculations remain compliant with your home government, verify your figures against official revenue publications rather than generic multi-currency tools. Select the specific schedule that corresponds to your vehicle's engine capacity, annual cumulative distance, and country of registration before submitting expense reports.

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