What Is the Mileage Rate in California?
Navigate California's rules for vehicle expense rates. Learn how federal standards apply in CA and how to properly account for your travel costs.
A mileage rate serves as a standardized method for calculating the deductible or reimbursable costs associated with operating a vehicle for business, medical, moving, or charitable purposes. This rate provides a simplified way to account for various vehicle-related expenses, such as fuel, maintenance, and depreciation, without requiring detailed tracking of each individual cost. Its fundamental purpose is to offer a consistent and administratively simpler approach to recognizing the financial impact of vehicle use for specific, qualifying activities.
Federal Mileage Rates
The Internal Revenue Service (IRS) establishes standard mileage rates annually to determine deductible vehicle costs. For the year 2025, the standard business mileage rate is 70 cents per mile. This rate covers costs incurred when using a personal vehicle for work-related travel.
Medical and moving expenses, specifically for qualified active-duty members of the Armed Forces, are 21 cents per mile for 2025. Mileage for charitable organizations is 14 cents per mile for 2025.
California’s Application of Federal Rates
California generally aligns with the federal standard mileage rates for state income tax purposes and for employer reimbursement guidelines. The California Franchise Tax Board (FTB) typically conforms to the IRS rates. California does not typically establish its own separate mileage rate for these purposes but rather adopts the federal figures.
California Labor Code Section 2802 mandates that employers indemnify employees for all necessary expenses incurred while performing job duties, which includes vehicle use. While employers are not required to use the IRS rate for reimbursement, it is recognized as a reasonable benchmark. If an employer chooses to reimburse at a rate lower than the IRS standard, they must demonstrate that the amount fully covers the employee’s actual costs of operating the vehicle for business.
Claiming Mileage Expenses
Mileage expenses can be claimed depending on an individual’s employment status and the purpose of the travel. For employees, employers commonly use the federal or state-adopted mileage rates when reimbursing them for business-related travel. These reimbursements are non-taxable income to the employee if processed under an “accountable plan,” which requires substantiation of expenses.
Self-employed individuals and businesses can deduct qualifying business mileage on both their federal and California state income tax returns. They have the option to use the standard mileage rate or calculate and deduct their actual vehicle expenses, such as gas, oil, repairs, and depreciation. Mileage for medical appointments or charitable activities can also be deducted on federal and state tax returns, subject to specific rules.
Documenting Mileage
Accurate record-keeping is fundamental for substantiating mileage claims, whether for tax deductions or employer reimbursements. For each trip, specific details must be recorded to meet IRS and state requirements. This includes the date, the starting and ending locations, and the total miles driven.
It is also necessary to document the business, medical, moving, or charitable purpose of each journey. Associated expenses, such as tolls and parking fees, should also be noted. Common methods for tracking this information include maintaining a detailed mileage log, utilizing mobile applications, or consistently recording odometer readings.